More than one-quarter of Americans lack emergency savings

An emergency savings cushion is one of the most effective ways to avoid debt and financial ruin. A cash account that is devoted solely to unexpected financing events, such as leaky roofs, medical emergencies, layoffs or car repairs allows consumers to cover these expenses without being forced to drain savings or run up credit card debt. However, the results of a new survey reveal that too few Americans have invested in an emergency fund, putting them at risk of financial difficulties in the face of an emergency.

The study, conducted by personal finance website Bankrate.com, shows that 28 percent of Americans have no emergency funds saved, an increase from the 24 percent that gave the same response last year. Of those consumers who have started an emergency cash cushion, 49 percent have not accrued enough to cover three months worth of expenses. This is an increase from 46 percent who answered this question last year.

“Incomes are largely stagnant, so it’s difficult for people to make significant headway on savings when household expenses are creeping higher but incomes are not,” Greg McBride, senior financial analyst for Bankrate.com, told CNN Money. “Prolonged unemployment has also depleted the savings of many people who at one time had a more appropriate cushion.”

Historically, financial professionals have recommended that Americans stockpile enough cash to cover roughly six months of their expenses if faced with an emergency. As the cost of living has risen and more Americans are facing job insecurities, some analysts are urging adults to be more conservative in their emergency savings and put away enough money to last them nine to 12 months.

Saving for an emergency event that may not happen is often the last thing on many Americans’ minds, especially those that may already be struggling to make ends meet. But the attitude of “just getting by” can quickly turn dangerous and threaten their overall financial and credit health when even a minor expense pops up.

Squeezing money out of a limited income can be challenging for families, but even small actions, such as selling unused items, cutting back on little luxuries and negotiating credit card rates, can provide individuals with more income. Starting an emergency fund is not an overnight process, but being diligent about putting small amounts away can pay off big in the future.