Americans continue to dig themselves in a deeper and deeper hole. While many have no savings, they continue to pile on the debt and liabilities. All of these problems will make the next recession difficult for most to get through financially.
A new report by Forbes states that 23% (nearly one in four) Americans are saving not even one penny from their paychecks. As part of its 2019 Savings Survey, First National Bank of Omaha examined Americans’ habits, behaviors, and priorities when it comes to saving, monthly spending, and retirement planning. And based on the fact that nearly 80% of Americans live paycheck to paycheck, the rest of the results of the survey are, unfortunately, unsurprising.
According to the survey, only 40% of Americans prioritize their savings for their emergency fund with 27% saying their highest priority is saving for their retirement. 39% of Americans plan on putting this year’s tax refund in a savings account while 25% have never withdrawn from their savings account. Most Americans are optimistic too, with 60% reporting that they are “somewhat” or “very likely” to be on track with their savings to retire by age 65.
But those few decent statistics don’t detract from the scary ones. Such as, 63% of Americans do not set annual savings goals and 74% of Americans put 10% or less of their monthly paycheck towards savings. In fact, 23% reported that they put in 0% of their monthly paycheck toward savings.
Almost half (49%) said they only have enough liquid funds to cover living expenses for 0-3 months and 26% attribute high costs of living as to why they don’t have as much in savings as they would like. With the level of debt Americans have saddled themselves with, easy to see why they are blaming the cost of living as opposed to their oppressive monthly debt repayments. However, only 13% say credit card debt prevents them from saving while 13% say student loan debt prevents them from saving.
The truth is, the sooner we all, individually and as a society, get a grip on our debt and overspending, the sooner we could be on our way to real wealth and prosperity. It’s an easy journey to start, but not an easy one to go through with. One can simply find themselves buried in debt while digging out could take years.
There is no time like the present to start though and it can be done! First, you’ll need to live on less than you make. Cut cable out and reduce your spending at restaurants. These are both pretty simple ways to cut costs, and believe us: reading is better for your mental health than TV anyway! And on this subject of cutting costs, a book we recommend is called Everday Millionaires, written by Chris Hogan. In this book, Hogan describes the daily habits of ordinary people who became extraordinarily wealthy and the simple ways they reduced their costs and lived below their means to accomplish millionaire status.
Hogan destroys millionaire myths that are keeping everyday people from achieving financial independence. Chris and the [Dave] Ramsey research team surveyed over 10,000 United States millionaires, discovering how these high-net-worth people reached their financial status and compiled the information into an easy-to-read book that will have you on your way to becoming wealthy.