Learning to save money has always been considered a virtue. You can even go back to ancient texts and find proverbial wisdom about being a saver. Unfortunately, as times have changed, so have our priorities when it comes to saving money. Even back in the day when people didn’t always have money in a bank account, they at least kept some stashed away in a coffee can or under the mattress for a rainy day. These days, though, most Americans don’t have enough money saved up to buy a cup of coffee or they have to look under the couch cushions when they need a little extra money.
Several recent studies have shown that about 62 percent of Americans have less than $1,000 saved up for emergency expenses. A major medical bill, appliance breakdown or car malfunction can happen at virtually any time. Those types of expenses can often range from $500 to $1,000. And taking care of those types of expenses can definitely qualify as an emergency for most of us. With the majority of Americans not having at least $1,000 in their savings accounts – and with about 29 percent reporting that they don’t have any money saved up at all – it is easy to understand why so many financial planners and experts are worried about the latest American saving habit trends.
What happened? When did we go from a nation full of people who tried earnestly to save to one where the majority of people have a thousand dollars or less for emergency expenses, let alone for the future? It seems as though the dwindling number of savers in this country isn’t due to a lack of effort. Most people report that saving money is important to them, and many people who report having little or no money saved today did have money saved up a decade ago. The Great Recession of 2008 seems to have done its fair share of damage to peoples’ savings accounts. As a matter of fact, about 57 percent of people who said they had a decent amount of money saved up in 2008 report that they had to use their savings because of the Great Recession.
When you factor in that most banks are not offering much in the way of financial incentives for people to open/maintain checking accounts, and the rising costs of educational education, you can certainly understand why folks are having a hard time getting their emergency savings funds established or built up to a meaningful level. Little emergency expenses, like overdue bills, car repairs and such seem to happen all the time. Combined with the ever-lingering effects of an economy that is not fully stabilized yet, and stagnant salaries, you get a good idea why some people just cannot seem to get their financial feet under them and on the path to becoming regular savers.
Saving money often requires lifestyle changes, though. For example, many Americans have trouble creating and following a basic household budget. Doing so can help to uncover regular expenses that can be reduced or eliminated. Short of finding these types of gaps in your budget, the only alternative for some is to start bringing in more money on a regular basis. Those who can do one, the other or both often find that once they get started, and have a little momentum behind them, that the habit to save money becomes second nature. Americans of every generation need to take some time to take a long hard look at their finances, find ways to either cut expenses or make more money and get down to the business of saving money. Because you never know – that next financial emergency could happen sooner than you think.