Americans are not saving enough

Originally published in the Clarion-Ledger, 4/4/2015.

PDF: Americans not saving enough

I was opening the garage door a few days ago and I heard a loud grinding sound. “That’s not good,” I thought to myself, then noticed that the door wouldn’t open all the way. Looking up at the door mechanism, my youngest son pointed out that the spring appeared to have broken in two. “Oh great,” I muttered to myself. “There goes summer vacation.” From past experience, such repairs aren’t cheap; such an event can detour you from even the most carefully-laid plans.

That’s how life goes, isn’t it? We’re going along just fine, trying to keep our ducks in a row, and suddenly, a garage door breaks, or a water heater goes out, or your kid needs a new band instrument. Having savings can certainly help in situations like this. But a new study from has found that, while the economy is getting better in some areas, one key factor that is apparently not improving is how much money we’re putting away for the future.

Savings are important, because consumers who have put aside some money for the future are a lot more likely to go into debt, and having money in the bank can bolster our ability to support the economy, and can even lead to less worry and stress.

Bankrate’s study looked at Americans’ savings habits, and there were some interesting findings. Perhaps the most surprising is that it’s not the rich who set the standard for saving; it’s the middle class. More than a third of households with annual income between $50,000 and $74,999 are saving more than 10% of their incomes, a rate that outpaces even the highest-income households.

“This proves the old adage that what counts isn’t how much you make, but how much you have left over,” said Greg McBride, CFA,’s chief financial analyst.

Overall, the study found that most Americans are saving no more than five percent of their incomes, and about one in five are savingnothing at all. More than a quarter of us are saving something, but not more than five percent.

Many financial experts recommend saving at least 10 percent of your income, but that’s a hard sell these days, since the economy has been slow to recover from the recession. Many families are finding themselves in a hand-to-mouth existence, not really drowning, but treading water. Without savings, a financial crisis – such as losing a job, having to replace a car, or a medical event – can send a family over the edge, into a cycle of debt or even bankruptcy.

The study looked at not just savings, but how Americans feel about their financial picture in general. There is reason for optimism in the numbers. Nearly a third of respondents said their financial situation has improved from one year ago and just 18% said it has deteriorated. Overall, the study found the second-highest level of optimism since the monthly survey began in 2010.

Here’s a few more findings:

Job security is rising – Those who are feeling more secure in their jobs than one year ago outnumber those who are feeling less secure by a margin of greater than two-to-one (27% to 13%).

Debt’s causing less discomfort – Consumers’ comfort level with debt decreased slightly over the past month, but continues to remain positive relative to a year ago. 23% of respondents are feeling more comfortable with their debt and 20 % are feeling less comfortable than March 2014.

Men are feeling more comfortable with savings – For the first time since the survey started, men are demonstrating more comfort with their savings than one year previous.

So, how do you put away money when it’s hard just to make ends meet? There are a lot of ideas out there, but I’ve found a lot of great advice from a site called Feed the Pig (, run by the American Institute of CPAs. Feed the Pig has a lot of advice about clever ways to save. Here are a couple of their recommendations:

Always be saving. Regardless of what else you’re doing, such as paying down debt, don’t neglect the need to put some money aside.

Don’t get discouraged. Don’t let mistakes or detours stop you from achieving your long-term goals.

Also, many experts recommend finding savings in everyday things. For example, if you go to a coffee shop every day, cut back to three times a week and drink coffee from the office. If you spend $6.00 on that mocha latte, take the $12.00 you would have spent, and put it in the bank instead. If you did that for a year, you would have $624.00 squirreled away for the future.

That’s just one of many tips out there for people who are trying to get serious about savings.

If you’re looking for some seriously creative ideas about savings, visit, which is run by the Consumer Federation of America. While we might not all be natural savers, anyone can learn.


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