It is worth noting that these statistics never take into account people's retirement funds. The survey also does not ask how much people have saved, but rather how much they have in their Savings Account. Many people keep all of their money in a checking account. Hence 1 in 5 people saying they don't even have a savings account. This is a rather misleading statistic overall. But yes, most Americans do not save. They have absolutely no education when it comes to personal finance, and feel absolutely no responsibility to educate themselves. They honestly think they can figure out their budgets on their own. This is shown by a lot of other similar statistics as well as many books on personal finance. The reality is we live in a debt culture. Most people do not understand why savings is necessary not optional. When shit happens, they just think, "There's no way I could have prepared for that." But the reality is that shit always happens. That's the whole purpose of saving.
62% of Americans Have Under $1,000 in Savings, Survey Finds
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Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#12This should be more explicit in saying "Savings Account" and not just savings. I have plenty of savings yet have 0 savings accounts (since they're practically useless). A little misleading here when many people just keep their money in checking or investment/retirement accounts.
This is what I was wondering. I assume they mean liquid savings. I rarely have any liquid savings but I have 40k in various retirement funds.
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Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#13I'll bet a lot of people have money elsewhere. However, I have a lot of friends who are poor (by that I mean that they qualify for food stamps), and it's amazing to see the way they spend money. When I was poor I bought the very cheapest shampoo ($1) and bought generic everything. The poor people I know now buy name-brand products and buy a ton of Christmas and birthday presents. My husband and I have savings but we don't do any of these things!
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#14As others are pointing out it is a totally meaningless survey. They asked, "How much money do you have saved in your savings account?".
Many people will only keep a small emergency fund in cash plus some money in a checking account and have everything else invested. Do those investment accounts and retirement accounts qualify as "savings accounts"? Probably not if people are reading the question literally.
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#15This should be more explicit in saying "Savings Account" and not just savings. I have plenty of savings yet have 0 savings accounts (since they're practically useless). A little misleading here when many people just keep their money in checking or investment/retirement accounts.
Well, I think it's relevant to consider that any type of investment vehicle outside of an insured savings account is subject to risk. Of course there are varying risk profiles, but in cold, hard terms an insured savings account (FDIC) is, conceptually, a secure store of funds. No downside risk and access without penalty to 100% of funds is something I don't think many investment vehicles can claim.
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#16There's a conversation to be had about many Americans living in precarious financial situations, but the reason why most Americans don't currently view their savings accounts as priorities is because in the current interest rate environment savings accounts and CDs are products with vanishingly little to recommend them. The APY my bank offers is one basis point . That's $1 per year for every $10k held in the account.…
I'd be surprised if it's just savings percentage driving this. As tech workers we're a bit more privileged in that we have access to salaries and opportunities that a lot of America doesn't have. Less than 6 years ago I was very much in that 62% category as high cost of living was eating into our combined paycheck pretty heavily.
A lot of people get into the dangerous mentality that since the interest rates are not high that it somehow makes saving not a good idea, similar to many people in our industry who won't max out their 401k simply because the employer does not fully match.
With regards to savings and lack thereof, regardless of salary. Far too many people excuse themselves from budgeting because they believe they are stretched too far to benefit. Yet the primary benefit of a budget is to understand where all your money is going, from major bills to day to day expenses; which can be a simple as that morning coffee or a pack of gum.
Knowing where your money is going is the first step to getting yourself out of debt and a bad situation.
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#17There's a conversation to be had about many Americans living in precarious financial situations, but the reason why most Americans don't currently view their savings accounts as priorities is because in the current interest rate environment savings accounts and CDs are products with vanishingly little to recommend them. The APY my bank offers is one basis point . That's $1 per year for every $10k held in the account.…
There's something to be said for having cash available - here and there, opportunities pop up for me that I can take advantage of. For example, recently I lent money at very high interest, short-term. If I suddenly get interested in prototyping electronics I won't even hesitate to buy an Arduino, sensors, and a few books. Little bits of cash is useful to "try things out."
Plus there's the "better sleep at night" factor.
People with little to no cash won't likely consider these things. Having that cash won't likely give you any good return, but there's the "freeing up your mind", "capitalizing on opportunities", and "sleeping better" things to consider.
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#18This should be more explicit in saying "Savings Account" and not just savings. I have plenty of savings yet have 0 savings accounts (since they're practically useless). A little misleading here when many people just keep their money in checking or investment/retirement accounts.
Well, I think it's relevant to consider that any type of investment vehicle outside of an insured savings account is subject to risk. Of course there are varying risk profiles, but in cold, hard terms an insured savings account (FDIC) is, conceptually, a secure store of funds. No downside risk and access without penalty to 100% of funds is something I don't think many investment vehicles can claim.
Checking accounts are also insured by the FDIC, and most people wouldn't include their checking balance when asked about a "savings account"
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#19A lot of people here think this is about you parse "savings". It's not:
47% of Americans say they lack the cash to pay a surprise $400 bill
http://www.politifact.com/punditfact/statements/2015/jun/09/...
Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds
#20"Savings account"? I have $5 in my savings account to keep in good stead with the credit union. Despite that, one can rest assured that the total net worth of my wife and me is many orders of magnitude greater than what our savings account reflects.
Maybe I'm out of touch, but asking about savings accounts strike as being in the same vein as asking how much I feed my horse.