Only 40% of Americans Report Savings Progress. Here’s How to Do Better.
We all know the fable of the ant and the grasshopper-how the ant diligently prepared for winter, while the grasshopper whiled away his summer singing and dancing. When winter came, the grasshopper froze and went hungry. It’s a lesson about working hard and focusing on the future meant to encourage children to be like the ant.
Unfortunately, when it comes to saving and investing, many of us have habits more like those of the grasshopper.
It’s well documented that too many Americans don’t save enough for key life goals like retirement, education, housing or even basic emergencies. That alarming fact is confirmed by the tenth annual America Saves survey released on February 22.
According to that survey, some 60% of Americans report falling short of their savings goals. Only 40% say they are making “good or excellent progress in meeting their savings needs.”
Among the findings
• Only 49% manage to save at least 5 percent of their income
• Just over half-52%-believe they’re saving enough for retirement to afford them a “desirable standard of living”
• Less than half-43%-have established an automatic savings plan outside their employer-sponsored retirement plan
• Only 38% report having “no consumer debt”
At the same time, the survey revealed some bright spots in Americans’ savings habits:
• 70% reported at least some progress in meeting savings needs
• 66% reported saving at least some of their income
• 63% reported “sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit”
The survey was released in conjunction with the tenth annual America Saves Week (February 22–28), a national campaign to encourage Americans to save more and get on the road to financial security.
“It’s a common theme to see expenses and debt get in the way of retirement savings,” said Kathy Stokes, director of the American Savings Education Council, in a news release. “But even saving just a small amount can add up over time. America Saves Week is a great time to encourage people to start saving for retirement, even if the amount seems small.”
Coordinated by nonprofit organizations, America Saves Week was launched in 2007 to encourage people to become more conscious of their own savings behaviors and to take positive steps to improve their savings habits.
A positive lesson from the America Saves survey: individuals and families who develop a “savings plan with specific goals” are more likely to meet with long-term success. Survey respondents who said they formulated and implemented a conscious savings plan were more than twice as likely to say they were making savings progress. Planners were also less likely to have consumer debt and more likely to spend less than they earned.
“The research clearly demonstrates that those with a plan are nearly two times as likely to spend less than they earn and save the difference,” said Nancy Register, director of America Saves. “America Saves Week is the perfect opportunity for everyone to set a savings goal, make a savings plan, and save automatically.”
Understand that saving is a skill that can be learned. So now is the time to learn how to build positive savings habits. Start making your plan today-and here are a few helpful resources to get you started:
Tips for saving more from America Saves Week
Strategies for saving more
