Saving money is often a good idea waiting to happen. However, the urge to spend coupled with the need to tuck money away for retirement puts major pressure on the average American family to save for other occasions. Recent statistics offer families some insight and direction for the future.
American Families Are Saving
Statistic Brain, a numbers crunching group, reports that the average American family savings account balance was $3,800 at the time of publication. Compiled from information gathered by the Federal Reserve and U.S. Census, this data shows that American families are able to save to a certain extent. At the same time, though, a CashnetUSA survey showed that 56% of Americans with children under age 18 maintain less than $800 in an emergency fund.
On the Edge
In fact, Bankrate.com, a financial data publisher, reports that 27% of Americans have no emergency savings to speak of. While $800 would cover a few small bills, it wouldn't cover a major problem. Further, three-quarters of Americans' savings would last them less than six months. The numbers speak to a middle ground of two to four months during which most American families would be able to ride out a time of financial crisis. While several months of savings is not long, it provides some time to find a better source of income.
The historical trend in the desire and ability of Americans to save is less than encouraging. The personal savings rate registered 4.2% compared with the average of 6.8% over the past 50 years. The personal savings rate is the percent saved from disposable income. This indicates a take-home pay of $2,000 would mean a family is saving $84 per month.
Competing to Save
The economic pressure on American families materializes in the competition they face from food inflation, continued high gas prices, saving for college and trying to put a little away for retirement. The savings data may encourage young families to prioritize savings over non-essential purchases, in hopes that they sock away more significant funds for a rainy day.
- Bankrate: June 2013 Financial Security Index
- StatisticBrain: American Family Financial Statistics
- Trading Economics: United States Personal Savings Rate
- CashnetUSA: CashnetUSA Annual Survey Finds 1 in 5 Americans Still Has Less Than $100 in Savings to Cover an Emergency
- Bureau of Economic Analysis: Personal Income and Outlays, November 2013
Brian Stankich began working in banking and insurance after obtaining a Bachelor of Science in economics from Purdue University. He later directed an international NGO in southern Europe and has certifications in skills and development training and coaching.