The GOBankingRates annual savings survey is a study that looks at the saving habits of Americans. The survey has been conducted annually since 2014 and asks questions about how much people have in savings, whether they have an emergency fund, and what their plans are for their savings. 

The findings of the sixth annual GOBankingRates savings survey were released in April 2019. The survey found that 69 percent of Americans had less than $1,000 in savings and that 45 percent had no savings at all. These findings suggest that many Americans are not doing a good job of saving for their future.

Bruce McClary is a spokesperson for the National Foundation for Credit Counseling (NFCC). He discussed the current state of the economy and its impact on employment, consumer confidence, and savings levels. According to McClary, the economy is doing well following the recession, and people are no longer struggling to find work. This has led to improved levels of consumer confidence. However, people still have poor levels of savings, leading to them being less prepared for unexpected financial emergencies. 

Key Takeaways from The Study

• You are not alone! Almost half of the population has $0 saved and another quarter has less than $1,000. 
• Saving money is difficult for many people because they are living paycheck to paycheck. 
• There are many solutions to this problem, but the number one solution for almost 40% of people is making more money! 
• Almost one in five people claimed that saving would be easier if they had less debt.
• The most common place people save their money is in a savings account. 
• Saving money does not have to be hard! There are many ways to make it easier for you, such as automating your finances or finding a lower cost of living area.

Nearly 70 Percent Of Americans Have Less Than $1,000 Saved

Bruce McClary, a spokesman for the National Foundation for Credit Counseling has said that while a $1,000 cushion is enough to cover most minor financial emergencies such as a car repair or a trip to the emergency room, he cautioned that it’s not enough to cover a major financial setback such as a job loss or a major medical expense.

The GOBankingRates survey found that the percentage of people with less than $1,000 in savings increased slightly between 2017 and 2018, from 57 percent to 58 percent. However, it increased more sharply in 2019, to 69 percent. At 45 percent, the percentage of people with no savings at all is at its highest since 2014 when the savings survey first began. McClary attributed the overall increase in the percentage of people with less than $1,000 in savings to a combination of factors, including stagnant wages and rising living costs. He noted that many people are one unexpected expense away from financial disaster.

When Asked About Their Primary Savings Goal, A Quarter Of Americans Chose Retirement 

In the GOBankingRates survey, 26 percent of people said they were saving primarily for retirement. At a rate of 74 percent, older adults were more likely to save for retirement than younger people, and men (28 percent) were more likely to save for retirement than women (23 percent). 

Bruce McClary said that retirement should be a goal for everyone, but it’s especially important for those nearing retirement age. McClary said that it’s never too late to start saving for retirement, but it is risky to save for retirement without having an emergency fund. He recommended that people have at least three to six months’ worth of living expenses saved in an emergency fund before they start putting money into a retirement account. 

He also cautioned that people should be aware of the early withdrawal penalty and taxes when they’re dipping into their retirement savings.

The survey found that only 19 percent of Americans are actively putting away money to cover a $1,000 emergency. This is a troubling statistic, as unexpected expenses can pop up at any time. Medical bills, car repairs, and home repairs are just a few of the many potential expenses that can strain our finances. 

That’s why emergency savings is so important. An emergency fund is a savings account that is used for unexpected expenses. Aim to have at least three months of living expenses ready in an account in case you need them. Doing so will give you peace of mind, safe in the knowledge that you have a cushion to fall back on if you experience a financial setback. 

The High Cost of Living

The cost of living is the amount of money necessary to sustain a certain level of living. The cost of living is often used as a measure of inflation. When the cost of living goes up, so do the prices of goods and services. The cost of living is high when people’s incomes don’t keep pace with inflation. 

The cost of living can be a barrier to saving money. The 2019 survey results found that 20 percent of respondents said that the high cost of living was an obstacle to saving money, up from 18 percent in 2018. 

However, according to the survey results, the biggest obstacle to saving money is living paycheck to paycheck. In 2019, 33 percent of respondents cited this as their primary reason, up from 31 percent in 2018. The age group most likely to cite this reason was 35-44 at 40 percent. Women were significantly more likely than men to say that living paycheck to paycheck was their biggest obstacle to saving money, with 38 percent of women and 27 percent of men citing this reason.

Respondents cited the high cost of living and living from one paycheck to the next as the most common reasons for not saving money. This is not surprising, given that the cost of housing, healthcare, and education have all increased faster than wages in recent years. Other reasons cited included not knowing how to budget, having high debt levels, unemployment, a low-interest rate on their savings account, and simply forgetting to put money aside as savings.

This suggests that living paycheck to paycheck is not just a symptom of a larger problem; it is the real problem. People are not saving because they do not have any extra money to save. This is likely due to a combination of factors, including low wages, high costs, and poor financial planning. 

If people want to improve their financial situation, they need to start by budgeting and tracking their expenses. Only then will they be able to find ways to save money.

Most people live from one paycheck to the next without much thought about where their money goes. This can be a dangerous way to live, as it can lead to debt and financial instability. 

Despite the benefits of budgeting, many people still choose not to do it. The survey revealed that 9 percent of respondents do not know how to budget their money. This is likely due to a lack of financial education. However, an even bigger group of people do not budget or track their money even though they know how to create a budget. This suggests that some people simply find budgeting too difficult or time-consuming. If this is the case, there are plenty of resources available to help make the process easier. 

Creating a budget and sticking to it may sound like a daunting task, but it’s relatively simple. Start by tracking your spending for a month so you have a good understanding of where your money goes. Then, create a budget that allocates your income towards essential expenses, savings, and debt repayment. It can be helpful to use a budgeting app or spreadsheet to track your progress. Finally, make sure to review your budget regularly and adjust as needed.

What Americans Need to Increase Their Savings

As part of the GOBankingRates annual survey, respondents were asked what they need to save more money. The most common answer was a higher salary. 38 percent of respondents said that a higher salary would allow them to save more. This was especially true for two age groups: those aged 35-44 and those aged 55-64. 

Lower debt was the second most common answer, cited by just over 18 percent of respondents. Moving to a town or city with a lower cost of living was also mentioned by a considerable number of people – understandable given the importance of the high cost of living on saving levels.

Other responses included a savings account with a higher rate of interest, access to a savings account in general, help with budgeting, and help with finances in general. 

So, if you’re looking to save more money, it may be worth considering a move to a cheaper location or asking for a raise at work. Of course, other factors can contribute to saving more money (such as cutting back on expenses), but these appear to be the most popular methods according to the survey.

Where Americans Keep Their Savings

As part of the survey, respondents were asked where they keep their savings. The most popular answer was a savings account, with 33 percent of respondents saying that they keep their emergency fund in a savings account. Other common responses included a physical safe or piggy bank, a checking account (whether interest-bearing or otherwise), a CD account, and a money market account.

Savings accounts are a good place to keep emergency funds because they are easily accessible and offer some protection from loss in the event of a financial emergency. However, savings accounts are not the best place to keep retirement funds. 

Retirement funds should be invested in a way that will provide growth over time, and savings accounts do not typically offer the same level of growth potential as other investment options. The best way to store retirement savings is in a retirement account such as an IRA or 401(k). These accounts offer tax advantages and provide the opportunity for long-term growth.

Simple Tips to Increase Your Savings

Anyone who’s ever tried to save money knows that it’s not always easy. The following are some simple tips to help you increase your savings every month.

Increase Your Savings Motivation

It can be difficult to find the motivation to put away money for a future goal, especially when there are so many immediate expenses competing for our attention. However, the consequences of not saving can be significant. Without a cushion of savings to fall back on, we may find ourselves struggling to cover unexpected expenses or weather a financial emergency. That’s why it’s important to make saving a priority.

Learn To Prioritise Savings

One way to make saving a priority is to create a budget and make sure that you set aside some money in savings every month. This will help you to get into the habit of saving and make it easier to reach your long-term financial goals. 

Make Saving an Automatic Process

Another tip is to automate your savings so that you don’t even have to think about it. By setting up a direct deposit from your paycheck into your savings account, you can make sure that you’re always putting away money for the future. By taking these steps, you can begin to build up your savings and create a solid financial foundation for yourself.

Recognize Your Fear of Failure

When it comes to saving money, one of the biggest obstacles can be fear of failure. It’s easy to become overwhelmed by all of the things you could be doing with your money, and then do nothing out of sheer paralyzing terror. But just because you’re afraid of failing at saving doesn’t mean that you have to give up altogether. 

Work With an Accountability Partner

One way to overcome your fears is to find someone who will hold you accountable. An accountability partner can help you stay on track by providing support and motivation. They can also offer helpful suggestions if you feel like you’re stuck. 

You can find more information about creating a free budget with the National Foundation for Credit Counseling at NFCC.org.