The importance of having an emergency fund doesn’t appear to be getting through to millions of Americans.

As of early 2024, only 44% had enough cash in their savings accounts to afford an emergency expense of $1,000 or higher, according to the latest Bankrate survey.

While the stats have improved modestly from a lesser 43% in 2023, consumers have yet to demonstrate a commitment to a rainy-day fund.

Instead, 35% of those polled say they would prefer to borrow the money, even if it meant taking on more high-interest credit card debt or borrowing from family and friends.

Bankrate senior economic analyst Mark Hamrick points out that now is the time to build while the economy is still going strong. If that changes, all bets are out the window.

“All too many Americans continue to walk on thin ice, financially speaking, with fewer than half indicating they would pay an emergency expense of $1,000 or more from savings,” said Hamrick.

That said, Americans' inability to save might not be their fault. Experts suggest that it could be a mental block that has more to do with psychology than responsibility.

Left brain vs. right brain in the savings battle

Mariel Beasley, principal at the Center for Advanced Hindsight at Duke University, suggests that whether someone has the skills to save money comes down to behavioral science.

She points to the two sides comprising the brain—one that is rational and the other that is emotional.

While it might seem as though the logical side of the brain is in the driver’s seat, that is not always the case. As a result, the person who struggles to save money might be led by their emotions at no fault of their own.

Indeed, financial decisions could come down to the way that brains are wired. While spending money can provide instant gratification, saving money generally does not.

This translates into three tendencies that the brain pursues: activities that are easy (like contactless payments), attractive (such as credit card rewards), and social (including dining out).

“Savings behavior is particularly difficult because it’s not easy, it’s not immediately rewarding and is not visible,” Beasley said.

However, psychologists say saving money could be a lot easier if businesses flip the script and apply similar psychology that gets people to spend money.

That might be a good first step, but it probably won’t help many cash-strapped consumers save enough. According to them, a lousy economy prevents them from building up a sufficient rainy-day fund.

It’s the economy, stupid

Nearly two-thirds of American adults blame inflation for their lack of savings, while nearly half point to high interest rates, according to the Bankrate survey.

Worse, many of these households are living paycheck to paycheck.

If that income were to dry up, two-thirds of adults fear that they would struggle to pay bills for one month. That's a far cry from the three months’ worth of living expenses—a recommended emergency fund size.

So far, those fears don’t seem to be deterring Americans from spending money.

Consumer spending remains in the driver’s seat, powering the U.S. economy to back-to-back quarters of stellar growth. But whether that spending is sustainable is a whole 'nother question.

As Creditnews recently reported, much of that spending is being fueled by record credit card debt, which reached $1.13 trillion last quarter.

On a more positive note, Corporate America could soon be stepping in to help Americans build their rainy funds.

A new law dubbed Secure 2.0 kicking in this year gives employers the option to support emergency savings accounts tied to retirement funds for staff.

“I do think there is tremendous interest in emergency savings programs. Having access to liquid cash can greatly reduce levels of financial stress,” stated Matt Bahl, vice president and head of workplace financial health at the Financial Health Network.