Being an Above Average Saver is a Pretty Low Bar

by Andy Hough on September 29, 2016

On this blog I write about ways to keep your expenses low. I don’t write about ways to make a big income or make money investing since I don’t have any expertise in those areas. I’ve never accumulated a lot of money since I’ve never made a lot of money and I’ve only made mediocre returns on my investments. Despite those shortcomings it appears that I am an above average saver.

According to this survey, 69% of Americans have less than $1000 saved. That is pretty surprising statistic. Even more surprising 34% have no savings at all and 40% of Americans making $100,000+ a year have less than $1,000 in savings. I’m not sure how it is possible to make six figures and have so little in savings. I’ve never made more than $30,000 a year and I still have more savings than that. According to this study I’m an above average saver. When I’ve had jobs that paid an hourly rate equivalent to $45,000 a year my savings accumulated rapidly. Of course, not everyone is as frugal as me and many have dependents to support as well. Still you would think that they would be able to accumulate more than $1000 in savings.

Part of the reason for the low amount of savings reported in the survey might be due to how the savings question was asked. The survey asked, “How much do you have saved in your savings account.” With interest rates currently being so low many people don’t bother putting their savings in a separate savings account. They just keep their savings in a checking account. Also, taking the question literally survey takers with all their savings in CDs or money market accounts would report $0 savings. I think it is quite likely that the survey under reported the amount of savings for most people. A better survey questions would be, “How much do you have saved outside of retirement accounts?” That would give a more accurate picture of how much people have said.

Even if the survey under reported how much Americans have saved I’m sure that most people need to save more money. I need to save more money myself. It doesn’t make sense for me to save much money right now since I have student loans accumulating 6.8% interest. My strategy is to just keep about $2000 in my savings account in order to maintain a little liquidity and put any excess money towards my student loan.

Are you surprised by the amount of savings reported by the survey?

{ 2 comments… read them below or add one }

1 Marilyn September 29, 2016 at 5:27 pm

I am not really shocked at all. So many people live paycheck to paycheck that they can’t imagine saving. My mother taught to me to squeeze sh#t out of a nickel and I abide by that. Sure I spend but never more than I make. It took me 55 years to be financially stable and I can tell you what a good feeling that is. I believe having a little is just enough. Yes, I travel more now than I ever did and gosh darn surely need help finding the good deals without a credit card ( flying miles). Any ideas or suggestions?

2 Andy Hough October 4, 2016 at 8:36 am

Marilyn – Most of my money saving ideas for travel involve credit cards. If I come across some good saving tips or deals that don’t require a credit card I’ll share them here.

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