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Nearly 7 in 10 Americans have less than $1,000 in savings
http://www.usatoday.com/story/money/personalfinance/2016/10/09/savings-study/91083712/
Sean Williams, The Motley Fool 1:03 p.m. EDT October 9, 2016
The U.S. is often referred to as the land of economic opportunity. Apparently, it's also the land of consumption and "spend everything you've got."
We don't have to look far for confirmation that Americans are generally poor savers. Every month the St. Louis Federal Reserve releases data on personal household savings rates. In July 2016, the personal savings rate was just 5.7%. Comparatively, personal savings rates in the U.S. 50 years ago were double where they are today, and nearly all developed countries have a higher personal savings rate than the United States. In other words, Americans are saving less of their income than they should be — the recommendation is to save between 10% and 15% of your annual income — and they're being forced to do more with less in terms of investing.
However, new data emerged this week from personal-finance news website GoBankingRates that shows just how dire Americans' savings habits really are.
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don't have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
Furthermore, even though lower-income adults struggle with saving money more than middle- and upper-income folks, no income group did particularly well. Some 29% of adults earning more than $150,000 a year, and 44% making between $100,000 and $149,999, had less than $1,000 in savings. Comparatively, 73% of the lowest income adults (those earnings $24,999 or less annually) had less than $1,000 in their savings account.
There was even minimal difference between multiple generations of Americans. From seniors aged 65 and up to young millennials aged 18 to 24, between 62% and 72% of Americans had less than $1,000 in a savings account.
3. Consider the use of separate accounts or cash
It's no secret that Americans have a propensity to spend first and ask questions later, which is made easy with the use of credit cards and alternative payment options. One of the best ways to break the "spend first" habit is to consider the use of separate spending accounts. For example, if you're budgeting $300 a month to entertainment, consider putting that $300 in a separate account or even a jar in the kitchen cupboard to create a degree of separation from your checking or savings account. This could cut down your desire to spend money if you see that it's available.
Another possible suggestion involves using cash instead of credit. Cash is tangible, and having to open your wallet and part with your cash to purchase a good or service can make a person think twice about whether a good or service is necessary.
http://www.usatoday.com/story/money/personalfinance/2016/10/09/savings-study/91083712/
Sean Williams, The Motley Fool 1:03 p.m. EDT October 9, 2016
The U.S. is often referred to as the land of economic opportunity. Apparently, it's also the land of consumption and "spend everything you've got."
We don't have to look far for confirmation that Americans are generally poor savers. Every month the St. Louis Federal Reserve releases data on personal household savings rates. In July 2016, the personal savings rate was just 5.7%. Comparatively, personal savings rates in the U.S. 50 years ago were double where they are today, and nearly all developed countries have a higher personal savings rate than the United States. In other words, Americans are saving less of their income than they should be — the recommendation is to save between 10% and 15% of your annual income — and they're being forced to do more with less in terms of investing.
However, new data emerged this week from personal-finance news website GoBankingRates that shows just how dire Americans' savings habits really are.
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don't have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
Furthermore, even though lower-income adults struggle with saving money more than middle- and upper-income folks, no income group did particularly well. Some 29% of adults earning more than $150,000 a year, and 44% making between $100,000 and $149,999, had less than $1,000 in savings. Comparatively, 73% of the lowest income adults (those earnings $24,999 or less annually) had less than $1,000 in their savings account.
There was even minimal difference between multiple generations of Americans. From seniors aged 65 and up to young millennials aged 18 to 24, between 62% and 72% of Americans had less than $1,000 in a savings account.
3. Consider the use of separate accounts or cash
It's no secret that Americans have a propensity to spend first and ask questions later, which is made easy with the use of credit cards and alternative payment options. One of the best ways to break the "spend first" habit is to consider the use of separate spending accounts. For example, if you're budgeting $300 a month to entertainment, consider putting that $300 in a separate account or even a jar in the kitchen cupboard to create a degree of separation from your checking or savings account. This could cut down your desire to spend money if you see that it's available.
Another possible suggestion involves using cash instead of credit. Cash is tangible, and having to open your wallet and part with your cash to purchase a good or service can make a person think twice about whether a good or service is necessary.
