Saving money is a smart move, as it can help ensure you will be able to meet your expenses if you lose your job. Plus, it can also help you rest assured that you’ll have enough money to pay for emergency bills that come in unexpectedly. But while a lot of people make it a point to save up for a rainy day, for retirement, or just to be able to buy something they really want, there are also some individuals and households who don’t bother saving at all.
How do Americans perform when it comes to saving their money? Below are some American savings statistics that can shed some light on just how seriously people take their savings accounts.
- Gross private savings in the United States was around $5.83 trillion in 2020.5
- Roughly 71% of people in the U.S. have a savings account.6
- Around 76% of people set up automatic transfers from their checking account or paycheck to ensure money goes into their savings account.6
- A big reason to save is the goal of buying a house, and 41% of Gen Z saves for this purpose.7
- During the COVID-19 pandemic, 59% of people with household incomes of $100,000 or more were able to grow their savings.11
2020: A Year During Which Many People Were Able to Save More Money
In 2020, there was an increase in the amount of money that people saved. This may have been the result of the COVID-19 lockdowns and restrictions that prevented people from spending money like they normally would.
- The personal saving rate (a ratio of savings to disposable income) was 7.6% in January 2020, compared to 33.7% in April of that year. By December 2020, the rate dropped to 13.5%.1
- In the U.S. in 2020, the value of personal savings was more than $2.3 trillion.1
- When looking at personal savings from one month to another throughout 2020, the peak was in April, when personal savings hit $6.414 trillion.2
- In a survey, 58% of respondents stated that the COVID-19 pandemic changed their approach to savings.8
- 28% of people with a household income less than $35,000 were able to grow their savings during the pandemic.11
- Although many people were able to save more during the pandemic, 17% of those making 6-figure incomes, and 41% of people making less than $35,000, had decreased savings.11
A Look at Personal Savings in 2021
The coronavirus pandemic is still affecting people in 2021, and the economy is not yet what it was before 2020. This uncertainty about the future appears to have an impact on people and their motivation to save.
- In February 2021, the personal saving rate was similar to what it was at the end of 2020, coming in at 13.6%.1
- Personal savings totaled $3.93 trillion in January 2021.2
How Much Do People Save, and Where Do They Save?
Although most Americans have some form of savings in place, they don’t always have a lot of money in their accounts. And different people also have varying preferences when it comes to where they put their money.
- A 2020 survey revealed that the median amount in savings was around $3,500, while the median emergency fund was around $2,000.6
- Nearly 3% of people have no money in savings.6
- 4.38% of people have more than $100,000 in savings.6
- Most people (roughly 22%) have anywhere from $1,000 to $5,000 in savings.6
- Nearly 75% of people have their savings in physical (a.k.a. brick and mortar) banks.6
- Roughly 48% of people have their savings in an online bank.6
- Although a Certificate of Deposit (CD) might’ve been a good way to save money in the past, lower interest rates have made this a less popular choice. The average APY for a 1-year CD was around 0.15% as of April 2021.9,10
There Are Many Different Reasons to Save
Most people strive to put some money aside in savings, but the reasons for those savings can vary greatly from one household to another. Here are some of the main reasons why people wanted to save their money in 2019.
- 38.1% of people stated they wanted to save for the purpose of liquidity.3
- 28.4% of people said they wanted to save up for their retirement.3
- 11.2% of people wanted to save up for purchases.3
- 6.1% of people aimed to save for their family.3
- 5.5% of people were striving to save up for education.3
- 5.1% of people wanted to save up for a home.3
- 3% of people admitted that they did not save.3
Methods for Saving for Retirement
With the cost of living continually on the rise, saving up for retirement is a wise move, as it can help ensure you will have plenty of money to live comfortably when you’re old enough to stop working. Being on a fixed income as a senior is tough, but setting up a solid retirement plan while you’re young can help ensure you’ll be fine when you’re older. And it turns out that people use a variety of methods to save for retirement.
- In 2020, 55% of people used a regular savings account to put money aside for their retirement. Only 19% of people had their money saved in a Certificate of Deposit.4
- 54% of people in 2020 stated that they have their retirement savings in a 401(k).4
- 20% of people chose to save for retirement by using a Traditional IRA, while 19% went with a Roth IRA in 2020.4
- 18% of people in 2020 did not have any accounts set up for their retirement.4
Many Millennials Are Doing a Good Job When It Comes to Saving
When it comes to how different generations are saving their money, millennials are doing quite well.
- Although 27% of millennials said they weren’t saving, around 24% of them had more than $100,000 saved in 2020.7
- 48% of millennials save monthly.7
- As of 2020, 73% of millennials were saving their money.7
- 75% of millennials aim to save for retirement, while 32% save for a home, and 27% save for their child’s education.7
- Millennials started putting money aside for their retirement when they were 24 years old.7
Overall, it appears that Americans took their savings more seriously in 2020, when the economy slowed down dramatically because of the COVID-19 pandemic. Only time will tell if they’ll continue saving wisely or if they’ll go back to spending more once things return to normal.
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