Look around, and you'll see the stock market suggesting that everything is hunky-dory with the U.S. economy. On the surface there's a lot to like, with the U.S. unemployment rate near a six-year low, manufacturing on the rebound, home prices still rising, and consumer confidence near its highest point in years. For all intents and purposes, the stock market reflects a number of improvements in the data that the Federal Reserve and investors follow.

However, one snippet of data continues to linger far behind this improved economic data and could be the straw that breaks the U.S. economy's back: U.S. savings.

Source: Ken Wilcox, Flickr.

Americans have it backwards
The personal savings rate for Americans is odd to begin with. When things are going great and Americans should be saving, they don't. They go out and spend their hard-earned money on homes, vacations, and other goods and services instead of beefing up their emergency funds and/or adding to their retirement or investment accounts. Conversely, when things turn sour with the U.S. economy, Americans go into conservation mode and only then begin saving. However, it's often too late to park a substantial amount in your emergency fund, as jobs and raises, as well as overall demand for goods and services, can become scarce.

We're more than five years removed from the worst recession we've witnessed in seven decades, but the inference from the data collected in a recent study conducted by Princeton Survey Research Associates International on behalf of Bankrate.com is that we may be in more trouble than ever.

In Bankrate's June release of its Financial Security Index, a monthly survey that measures how consumers feel about different aspects of their personal finances compared with the year-ago period, it noted that 26% of respondents -- its survey collected answers from 1,004 adults across the country -- had absolutely no emergency savings, with an additional 24% sporting less than three months' worth of savings. As icing on the cake, 17% noted having only enough to cover three to five months of expenses, with another 9% failing to respond or simply not knowing. Added together, and factoring in that rounding may not equate to exactly 100%, this means just 23% of respondents have at least six months of adequate savings to handle an emergency, which can range from anything like losing a job to unexpected medical expenses.

Graph by author. Data source: Bankrate.com.

Highlights and biases
There were some compelling highlights to Bankrate's data, but also two factors we should keep in mind.

According to its study, the people who identified as having only a high school education were more than three and a half times more likely to have no emergency savings than a college graduate was. With a Pew Research study in February finding that young adults aged 25 to 32 with a college diploma earn $17,500 more annually on average than a same-aged adult with a high school diploma, going to college has become more a prerequisite for economic advancement than an option.

Source: Tax Credits, Flickr.

Also, retired individuals were more than twice as likely to have at least six months of expenses saved up than someone aged 18 to 29. This isn't exactly a surprise, given that most young adults are just getting their foot in the career door or are still working their way through college, while retirees have had plenty of time to save up their money and know from experience how to weather recessions. Still, only 36% of retirees confirmed that they had enough to cover unexpected expenses for at least six months. That's worryingly low.

However, one of those "factors" I told you that you should be aware of is that Bankrate only quantified savings as a checking, savings, or money market account. Let's remember that these accounts earn very low interest rates, so it's probably not too prudent for seniors (or anyone for that matter) to be keeping too much of their money in a money market or savings account, where it's netting 1% or less. While the gains will be nominal, in real money terms you'd be losing to inflation, which is averaging closer to 2% at the moment.

Also, Bankrate's data doesn't take factor in retirement accounts. Bankrate wanted to establish the ability to rapidly access funds, which you can do with the click or push of a button from a checking, savings, or money market account, while it's not nearly as easy to sell stock or get a check from your investment management company. Yet this could also mean that considerably more than that 23% of people in the survey do have access to funds to support their expenses for at least six months -- just perhaps not as quickly as Bankrate believes you should have access to those funds.

People don't know what to do with their money
Even scarier than the fact that Americans are bad savers. and that any reasonable emergency could wipe out a number of individuals and families, is that few Americans really understand what to do with their money.

In Bankrate's July Financial Security Index, it took a closer look at what 1,000 adult respondents believed was their best investment opportunity if they had to invest money they wouldn't need for 10 years. Here's what the respondents had to say:

Pie chart by author. Data source: Bankrate.com. 

That's not a misprint: One-quarter of respondents think cash under the mattress, a savings account, or a CD is their best way to invest over the next 10 years. Even if lending rates move higher, there's a genuine chance that citizens would lose money in real terms to inflation over the next decade. And of course, cash is the worst investment choice of all, since it will lose money in real terms in all situations, except those rare instances where there is deflation. Not surprisingly, young adults between 18 and 29 favored cash more than any other investment option.

The 23% for real estate also isn't a typo. Unfortunately for many Americans, their reality of the housing sector is the one where home prices doubled in a decade, collapsed, and are once again on the rise. But this isn't an accurate representation of the housing market. According to Robert Shiller in his book Irrational Exuberance, inflation-adjusted home prices outpaced inflation between 1890 and 1990 by just 0.21%, and an even paltrier 0.08% between 1950 and 1997. A primary home is a place to live and not an investment, and many people just don't understand that correlation.

Additionally, 14% of respondents believe gold or other forms of precious metal will outpace all other investments, while 5% selected bonds. The truth, though, is that the 19% who selected the stock market are by far the likeliest to be correct.

Source: Nathaniel Zumbach, Flickr.

Over the long run, stocks have handily trounced bonds and precious metals. Individual companies are likely to see increasing demand for their goods and products over time (if you've done your research and picked out quality or innovative companies, that is), while metals and bonds are subject to external forces, such as monetary and fiscal policies, which can lead to inflation and destroy your real money-earning potential.

Key takeaways
There are a number of important takeaways from Bankrate's recent studies.

First, if citizens don't have an emergency fund, they need to develop a budget that will allow them to build one up over time. Emergencies happen and things do come up, so these individuals are doing themselves a disservice by not properly preparing for the future.

Secondly, young adults should seriously weigh the rewards and costs of going to college. This doesn't mean everyone needs to go $200,000 in debt to get a degree, but having a degree has been clearly shown to give a graduate a better chance of long-term advancement in terms of pay, which can be crucial to building an emergency fund and saving for retirement.

Finally, people need to understand the difference between nominal gains and real-money gains. If your money is under the mattress or earning 1% in a CD, you're going to lose money to inflation over the long run. I can understand putting some of your investable money in these financial tools, but historically speaking, stocks have given Americans a considerably better rate of return because of increasing demand over time for goods and services.