Why People Are Burning Through Savings for Everyday Costs
You've been diligent about saving, but that's only half the battle in holding onto your money.
For many, putting money into savings isn’t as hard as keeping it there. Instead of allowing it to collect interest, people are making withdrawals to pay the bills.
This might work in the short term, but it can put their financial futures in jeopardy. Keep reading to find out why many Americans are relying on their savings to stay out of the red.
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Rising Costs of Everyday Expenses
Life isn’t as cheap as it used to be. For many, simply keeping up with everyday expenses can mean having to dip into savings.
Gas and oil is one cost that has been on the rise.
“For those heating their homes this spring and commuting to work, the war has wreaked havoc on the oil markets,” said Kevin C. Feig, certified financial planner (CFP) and founder of Walk You To Wealth.
As of May 19, 2026, regular gasoline cost an average of $4.53 per gallon, compared with an average of $3.18 per gallon one year earlier, according to AAA.
“Similar to the impact at the pump, groceries continue to be affected by inflation,” Feig said. “Paying more for food is simply the new normal and in most cases, wages haven’t kept pace with this level of inflation.”
In March 2026, the cost of food increased 3.3% over the past 12 months, according to the Consumer Price Index. This breaks down to a 2.7% rise in the cost of food at home and a 1.9% jump in the price of food away from home.
Housing is yet another everyday expense that can consume a paycheck.
“Financing costs have increased, home insurance has skyrocketed in some locations and rent continues to rise with inflation,” Feig said.
Increased Temporary Expenses
“What used to be one-off costs are happening more often,” said Trevor Johnson, founder and financial planner at Dream Weaver Financial Planning.
He cited expenses like home repairs, car maintenance and medical bills as costs that don’t feel optional, but can add up fast.
“When they hit close together, savings becomes the default funding source,” he said.
For example, fixing a broken leg can cost up to $7,500, according to Healthcare.gov.
In 2025, 85% of homeowners faced an unplanned repair — and even worse, 58% of had nothing saved for an unplanned repair, according to a survey conducted by Clever Offers.
As for auto repairs, the average alternator replacement costs between $754.07 and $849.96, according to Kelley Blue Book. Even worse — expect to pay around $1,125.46 to $1,246.75 for a fuel pump replacement.
Pricey Lifestyle Habits
“A lot of people built their spending habits during a period when things felt more affordable,” Johnson said.
Cutting back on costs like travel, dining out and subscriptions might sound easy, but he said people commonly dip into their savings to maintain their lifestyle, instead of cutting back right away.
Depleted Emergency Funds
“The definition of ‘emergency’ has stretched,” Johnson said. “Higher monthly expenses alone can feel like an emergency.”
When people start tapping their emergency savings for regular shortfalls, it can easily become a habit, eroding the balance faster than expected, he said, which means you might then dip into other savings accounts to cover costs.
Faster Access to Cash
“Some clients have pulled money out of the market over the past couple years due to uncertainty,” Johnson said. “That money sits in cash, which makes it easier psychologically to spend.”
Instead of putting the cash aside for long-term goals, people slowly deplete it for daily needs, he said.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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