Nearly Half Have Less Than $500 in Savings: How To Build Up Your Balance in 2024
According to a recent survey by GOBankingRates, nearly half of Americans have less than $500 in savings — and almost 60% of Americans have less than $1,000 saved up.
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Learn: How To Get $340 a Year in Cash Back – for Things You Already Buy
Considering high inflation, high rents and the high cost of financial emergencies — such as a blown transmission — having a small savings account balance can be a huge stressor.
Read on for the details of the survey, which generations are struggling to build savings and quick ways to save up at least $500 in the next few months.
Nearly Half of Americans Don’t Have $500 in Savings
According to the survey, 49% of Americans have $500 or less in their savings account, with 36% reporting they have less than $100 saved up.
This means that a small financial upset can cause these households to end up in debt — or more debt. Unfortunately, this lines up with a recent survey that stated 61% of households are in credit card debt.
When comparing the savings balances of men vs. women, the numbers are even more drastic. While 45% of men report having less than $500 saved, 54% of women report the same.
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Savings Account Balances By Age
You’d expect savings account balances to grow by generation — but that’s not always the case. According to our survey, only 43% of savers aged 18-24 report having $500 or less in savings, while a whopping 51% of savers aged 55-64 report the same.
And for those reporting a very low saving account balance, the 35-44 age group have the highest percentage, with 41% reporting a balance of $100 or less.
On the other end of the spectrum, those with $10,000 or more in savings are mostly aged 55 and older — which comes as no surprise. But no age group had more than 20% of respondents report having $10,000 or more saved up.
How Much Should You Save?
With the shocking report of a majority of Americans having less than $1,000 in their savings account, it begs the question: “How much should you have saved?”
Most financial experts recommend having an emergency fund in place of at least $1,000 or a full month of expenses saved. This helps cushion the blow of financial emergencies and helps you avoid getting into credit card debt.
But once you’ve taken care of any high-interest debts and have more financial obligations — such as a mortgage or children — experts recommend putting away three to six months of expenses into your savings account.
For example: If you spend $5,000 per month on necessities, this means you should have $15,000 to $30,000 saved.
But this number might feel out of reach for many Americans, especially those struggling to set aside a few hundred dollars. So focus on getting that first $500 fast — and then you can look to grow your savings over time.
How To Save $500 Quickly
There are many ways to save money, but putting together $500 quickly requires a focused effort. Here are a few ways to stack cash within the next few months:
Get on a Budget
While things might already feel tight, putting together a budget can actually help spell out exactly what you need.
Before you write the number down, it’s always a good idea to review your past 90 days of spending, categorizing every transaction to see exactly where your money is going. Once you’ve audited your spending, you can put together a budget based on your real numbers.
Start with your income, including your job income and any side income you might bring in. Focus only on the take-home pay, because that’s what you can use in your monthly budget.
Then list all of your bills, including utilities, subscriptions and other monthly recurring expenses. Next, list your variable expenses, including things like gas, groceries, restaurants, shopping, clothing and other daily spending.
Finally, you’ll want to go through your budget and only focus on your “needs” and choose to temporarily suspend your “wants.” This will help you save every penny possible until you hit that $500 mark — or more.
Check With Competitors for Your Bills
Once you have a budget in place, you can now sart finding ways to save money. First, focus on your fixed expenses, such as your utilities, phone bill, internet and insurance.
Many of these providers have competitors that offer discounts for switching services. While your utilities may not have multiple options, most people can call a competitor for your cell phone, internet or insurance company and get a quote to switch.
Go through each bill and see if you can get a better price to switch. This can save you $100 or more within the first month, depending on the deals you can get.
Skip Restaurants for a Month
Most Americans spend a decent amount of money eating out. According to a recent survey, Americans spend about $166 per person, per month on restaurants.
If you have a household with four people in it, this is $664 in savings in just one month! If you simply skip eating out for 30 days, you can quickly stack cash into your savings account.
“Pack lunches instead of grabbing takeout — savings per week: $20-$40,” said Andrei Vasilescu, co-founder and CEO of DontPayFull. “Ditch sugary drinks for water and brew your own coffee — savings per week: $10-$20. Every penny counts!”
Get Cash Back for Online Shopping
If you do any amount of online shopping, you could be earning cash-back rewards at the same time. There are shopping apps and portals that reward you for using them when you make purchases online.
Apps like Rakuten or Capital One Shopping can be used from your mobile device to shop for items. They may even help you get discounts by showing coupon codes or cheaper places to buy what you’re looking for. You can also install shopping apps directly into your computer browser, so you can quickly activate your cash-back savings when shopping through your computer. The apps are free to use, too.
Just be careful not to use the cash back as an excuse to buy things you otherwise wouldn’t, or you could end up spending more than you save.
Cancel Unused or Rarely Used Services
If you’re serious about saving money, you’ll want to take a hard look at the services you’re paying for — and figure out which ones you can live without.
“Swap paid streaming for free library movies and e-books,” said Vasilescu. “Download workout apps instead of gym memberships. Free fun is everywhere — you just gotta hunt for it!”
These days, it’s common to have a dozen streaming services and apps that you’re paying for on a monthly basis. You’ll need to go through each service and determine which ones are worth keeping.
In addition to cutting out streaming services, other types of memberships and monthly services may need to be scaled back to save additional money. This includes gym memberships, box services and other monthly costs you can live without.
Pro tip: If you aren’t 100% sure about what services you’re signed up for, you can use a tool like Rocket Money to find hidden subscriptions automatically.
Sell Unused Items
While saving money on your monthly expenses is one of the fastest ways to build your savings account, you can make some extra money by selling unused items around the house.
Look through your garage, attic or any closet that has old items buried to find something that might have value. You can quickly list items for free using platforms like Facebook Marketplace or eBay.
Selling items around your home can help you fetch a few hundred dollars very quickly, depending on what you have.
Consistency Is Key!
Saving money once is easy, but staying consistent is where you can really build up a sizable savings account. Saving month after month builds a lifelong savings habit that will pay dividends into the future.
“Remember: Consistency is key,” said Vasilescu. “These small changes, done consistently, can turn into big bucks. Track your progress, celebrate milestones and stay motivated. You’ve got this!”
GOBankingRates surveyed 1,063 Americans aged 18 and older from across the country between Nov. 27 and Nov. 29, 2023, asking twenty-two different questions: (1) What category best describes your current financial institution?; (2) Have you considered changing banks within the past year?; (3) If you have considered changing banks in the past year, were any of the following factors? (select all that apply); (4) Which feature, perk, or other offering is most important to you when opening an account with a new institution?; (5) Are you currently satisfied with all your banking products and services offered by your bank/credit union?; (6) Would you ever have different types of accounts across multiple banks? (i.e. checking at Chase, but savings at TD Bank); (7) What is your most preferred method of banking?; (8) Which of the following is the biggest factor of you staying with your current bank?; (9) Which of the following bank accounts do you currently use/have open? (Select all that apply); (10) How much is the minimum balance you keep in your checking account?; (11) How much do you currently have in your savings account?; (12) What amount of a sign up bonus would make you consider switching banks?; (13) Have you considered using any app-only banking platforms (aka neobanks) in the past year? (e.g. Current, Chime, Dave, etc.); (14) How important is it to you for your bank to be affiliated with a crypto exchange/platform?; (15) In the past year, how often have you written a physical check?; (16) When was the last time you visited your bank in-person?; (17) Why would you choose to visit your bank in-person? (Select all that apply); (18) Have you had an overdraft on your checking account in the past year?; (19) How much do you trust your current bank to act in your best interest?; (20) How much do you trust your current bank to protect your private information?; (21) Do you trust regional banks more than national banks?; and (22) How much cash do you keep at home?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: Nearly Half Have Less Than $500 in Savings: How To Build Up Your Balance in 2024
