Kai Risdahl

the answer to why americans are keeping less of their paychecks was pretty obvious to everyone i spoke to today inflation still remains fairly strong gas prices grocery prices continue to rise this is really reflective of continued impacts of inflation people are just not saving much at the end of the month

That was Ted Rossman of Bankrate, Matt Schultz of LendingTree, and Ryan Sweet of Oxford Economics.

Sweet says the low savings rate makes it harder for households to weather a job loss or a costly car repair.

The consumer is essentially running out of that buffer.

That safety net is starting to get depleted.

And in many cases, that safety net is gone altogether, says Sweet, which means more household debt.

We start to get concerned that consumers will turn to using credit cards, which we've already seen.

And Sweet says that could cause people to fall behind on payments.

But even as savings dwindle, consumers keep on spending, especially higher income ones.

That's not always been the case, says Bankrate's Ted Rossman.

Normally, when people are stressed about the economy, they pull back on things.

They stop traveling.

They stop going out to eat.

Rossman says the fact that we haven't seen pullback on a wide scale could mean consumers think the current oil price spike won't last.

We keep hearing like from the president and others that war is going to be over soon.

Gas prices are going to come back down.

I do wonder if some people are pulling more of the short term lever about like, OK, I'll dip into my savings for now, but it's a short term adjustment they're willing to make.

Still, the savings rate is less than half of what it was two years ago, which means the trend has been going on for a while now, says LendingTrees Matt Schultz.

I think that struggle is driving more of this right now than confidence is.

Schultz says the best thing consumers can do is to make the most of whatever savings they're able to pull together.