Most Americans Making Little Progress in Savings

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Sad young man has spent all the money in his piggy bank
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, %VIRTUAL-article-sponsoredlinks%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

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Most Americans Making Little Progress in Savings

This is my personal favorite! Think of yourself as a regular monthly bill you have to pay. All you have to do is arrange to have a set amount of money directly deposited from your paycheck into a savings account each month.

I recommend using a separate savings account because if you have access to your funds in your checking account, you're more likely to spend them. Again, it might hurt a bit at first to take home a little less every month, but trust me, after a while you won't even notice it's gone. Here's a moment when the "set it and forget it" strategy works wonders.

It feels great to be rewarded for your hard work. And it feels even better to spend that hard-earned bonus on something you’ll enjoy, like a trip to France or an iPad. At the same time, the pleasure of a vacation or new gadget is short-lived compared to financial security.

So make a pact with yourself to put every bonus you get from here on out to good use. If you direct 90 percent of your bonuses straight into your savings account as a rule, you’ll still have 10 percent to treat yourself with (plus the comfort of knowing that you're building a well-earned safety net). I live by this rule.

OK, OK, this seems like an obvious one -- and easier said than done. Actually, most people spend money on more unnecessary items than they think. So take time to look at where your money is going in detail and begin to cut back. Saving $10 here and there could help you put a lot away in the long run.
Many banks offer seasonal accounts meant to save for holidays like Christmas. These accounts give you reduced access to your accounts, charging a hefty penalty each time you withdraw more than permitted. Since emergencies don't occur often, a seasonal account could make sure you're touching it only when needed (just make sure you're not tempted to blow it all on Christmas gifts).
I love this one. Chalk it up to my massive craving for organization, but I'm all about getting rid of things I no longer use. Rather than throwing these unused goods away, start selling them, and put that money into your emergency fund. All you need to do is post them to a site like eBay or Craigslist or Amazon and you can get rid of items from the comfort of your home. You can also take your clothes to a consignment shop to have them sold for you.
Instead of saving your pennies, put aside any $5 bills that come your way. Never spend a $5 bill again, and you'll be surprised by how quickly this silly trick will help you come up with a few hundred dollars to add to an emergency fund.
You could pick up odd jobs via websites like,,, or
If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your freedom fund. It may only add up to $100 extra each year, depending on your spending, but every little bit counts.
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