Most Americans Making Little Progress in Savings

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Sad young man has spent all the money in his piggy bank
Alamy
By Sharon Epperson

Stagnant wages, and prolonged unemployment and underemployment have meant that many Americans continue to struggle to save. Finding it difficult to build wealth through homeownership has also impeded many individuals and families from making progress in meeting their savings needs, according to a national survey released this week.

The survey found that only about one-third of Americans say they're making "good" or "excellent" savings progress, while nearly two-thirds are making only "fair" or "no" progress.

The survey found the issue for many Americans, regardless of income level, is the ability to spend less than they make and save the difference.

"Only about one-third of Americans are living within their means and think they are prepared for the long-term financial future," said Stephen Brobeck, executive director of the Consumer Federation of America, which commissioned the survey along with the American Savings Education Council and the Employee Benefit Research Institute.

"One-third are living within their means but are often not prepared for this long-term future," he added. "And one-third are struggling to live within their means."

The survey of more than 1,000 adults was released the first day of America Saves Week,
an annual initiative of local, state and national organizations (including many colleges, universities and nonprofit organizations) to promote savings and help people assess their savings status.

Most Americans don't even have a plan of where to start.

Only half of American households have a savings plan with specific goals, and only four out of 10 have a budget that allows for sufficient savings, according to the survey.

But those who have calculated how much they need to save are far more likely to reach their savings goal, according to EBRI president and CEO Dallas Salisbury. Setting up automatic savings for emergencies, college and retirement either through a bank or an employer can help individuals reach their goals, he said.

Lower-income Americans -- those with annual household incomes of $25,000 to $50,000 -- report having the most difficulty saving, including spending less than their income and saving enough for retirement, according to the survey.

And fewer than two-thirds of people in that group have a sufficient emergency fund, compared with over 80 percent of those who make $50,000 to $100,000. Yet that means nearly 20 percent of higher middle earners don't have enough saved for emergencies, either.

The problem is that one-fifth of higher-income adults fail to spend less than their income and save the difference. While that's less than the 30 percent of lower-income Americans living beyond their means, it is still a significant percentage of people who are better off than most.

Another disturbing statistic comes from the National Foundation for Credit Counseling's Financial Literacy Survey which revealed that 31 percent of consumers have zero non-retirement savings.

"How did you pay for your last emergency? If it was with a credit card, that's a red flag," said Gail Cunningham of the NFCC, an America Saves partner organization. "Americans with no money socked away for the inevitable rainy day are on a slippery slope. When money is tight, it's difficult to think about saving. However, that is when an unplanned expense can be most devastating financially."

Higher-income households often find it just as difficult as those with lower income to earmark money for saving.

"The more people make, the more they spend," Cunningham said. "What we suggest is when you get a raise or bonus pretend it never happened. If you were living just fine before you got it, bank that extra money."

To find out more about America Saves Week and to assess your own savings, go to www.americasavesweek.org.


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Brucie

They're living like there's no tomorrow or They wish and hope that they would soon be discovered by one of the Reality TV production companies to grant them up to $200K salary per show ($2,500 per Show's re-run)and push them to start up a business and grow while on the Show? Some other Reality TV are cheapsakes that pays minimium wages? Famous movie stars/prime TV stars are accepting pay cuts cuz of the new Reality TV stars attracting new crushes/viewers away from them as they like the crooked or ugly or beard thing on them. I think I'll support Joel Osteen TV ministry (soul winnings is more important than fame) than the Reality TV Production thing. Eternal life with Jesus Christ's preparation is better than short term fame on earth.

February 27 2014 at 3:23 AM Report abuse -1 rate up rate down Reply
Richard

Now here is a shocker. With petro bandits confiscating more and more of oiur wealth and government taxes on the city, county, township and state level ever increasing - I wouldn't expect Americans to have much money left. Things were DEFINITELY better in this country in the 60s and up until the oil embargo of the mid 70s.

February 26 2014 at 8:49 AM Report abuse +3 rate up rate down Reply
scottee

what about the federal government? what progress are they making with savings?
and who will stop The Fed from printing and diluting our dollar? and stop The Fed from manipulating interest rates to benefit only the government and the banks? who benefits from 0% interest rates? not the saver. who will stop congress from rewarding spending and debt via the tax code and punishing saving and investment the same way? who will do this?

February 26 2014 at 8:19 AM Report abuse +3 rate up rate down Reply