Why Americans Struggle to Save
Happy America Saves Week!
That’s right, we’re in the middle of a national, week-long push to promote good saving behavior.
Of course, being LearnVest, we love any initiative that encourages good money habits. And it seems as though better money habits are in need: Only about one-third of Americans say they are currently making “good” or “excellent” progress on their savings, according to a new survey.
Meanwhile, roughly two-thirds of us admit to making no—or only “fair”—progress on building up those funds.
There are, of course, some legitimate barriers to saving. As the survey’s press release notes, real wages have largely remained stagnant since the recession, and the unemployment rate is relatively high. On top of that, fewer Americans have been able to rely on home ownership to grow their wealth—the percentage of people building equity in a home fell to a little over half, down from about two-thirds in 2010.
The one bit of good news is that, even if Americans aren’t saving a lot, we’re still saving something—even though a higher paycheck doesn’t necessarily mean a better funded nest egg. The survey revealed that 82% of those who earn between $50,000 and $75,000 a year are currently spending less than they earn, and saving the difference—slightly more than the 81% of those who rake in between $75,000 and $100,000. The biggest difference between saving behaviors were between the lowest and highest income ranges. Some 69% of those making $25,000 to $50,000 say they save the difference between their earning and spending.
One other barrier may be just that many of us simply don’t have a savings strategy in the first place. Just half of survey respondents said that they have specific savings goals—and a plan to get them there. But, “as numerous studies have shown, those with a plan save much more effectively than those without one,” Dallas Salisbury, C.E.O. of the Employee Benefits Research Institute and President and Chairman of the American Savings Education Council said in the press release.