What is the consequence of having a low savings rate?

Having a low savings rate primarily leads to financial insecurity. When individuals do not set aside sufficient savings, they may find themselves unprepared for unexpected expenses, such as medical emergencies, job loss, or major home repairs. This lack of a financial safety net can create stress and limit one's ability to make long-term investments or pursue opportunities that require upfront capital. Furthermore, financial insecurity may lead to increased reliance on credit, which can exacerbate debt problems and make it harder to achieve financial independence. In contrast, higher levels of savings typically provide a buffer against life's uncertainties and contribute to overall financial stability.