Are Americans Saving Enough? (Hint: No)
From early childhood we are taught the value of a dollar and how to save our money for “a rainy day.” Unfortunately many of those lessons go out the window when we grow up and have to worry about things like rent, car payments, and insurance, while still managing to feed ourselves. As a result many Americans live paycheck to paycheck, without saving a penny for emergency funds or for their future. But how bad is it as a nation?
A new survey by GOBankingRates found that 28% of Americans have $0 in savings and another 21% don’t even have a savings account. Overall only 29% said that they have more than $1,000 in their savings account. To be fair the survey was only looking at savings account balances and not at IRA or retirement accounts that workers might have. Still the fact that 62% of those surveyed said they have less than a grand in savings is alarming.
With all the talk you hear in the news about lazy Millennials you might assume the problem was mainly with those aged 18-34. However that’s not quite the case. The survey broke out results by age and found that the generation most likely to not have a savings account was actually Baby Boomers (55-64) with 22.8%. Meanwhile those most likely to have $0 saved were young Gen Xers (35-44) at 31.6%.
On the other hand the percentages of those who have more than $10,000 saved goes about how you’d expect, with 20% of seniors saying they have at least $10k saved. That figure diminishes with each younger group, getting all the way down to 7.5% among younger Millennials. Aside from those young Millennials, the group that could be considered the worst off when it comes to savings is older Generation Xers, with only 28.9% of respondents having more than $1,000 in savings followed by Baby Boomers at 29.6%.
These figures highlight a large problem in the finances of many Americans. Unfortunately having less savings tends to cost you even more since emergency purchases are often made with credit cards that carry high-interest rates. Additionally overdraft fees or other charges assessed to customers who for dip below a certain minimum balance can be pricey and lead to even more monetary issues.
Are you part of the 49% that have $0 in savings or no savings account at all? The best thing you can do to start building up your savings account is to sign up for automatic transfers from your checking to your savings account so that you save before you spend. It may be painful at first, but you’ll be accruing interest on your money instead of paying for it on your credit cards. Good luck.