For quite a while now, Americans haven’t necessarily been known as savers. Instead of setting aside at least 10 percent of their income for a rainy day or retirement, they buy large televisions, upgrade their homes unnecessarily and purchase a new car they don’t even need. They just don’t save.
According to this month’s Gallup Economy and Personal Finance poll, Americans enjoy saving more than they spend and the gap has widened: 62 percent compared to 34 percent. This ratio is at its highest since 2010, the height of the Great Recession – the smallest gap, meanwhile, was in 2001 when it was 48 percent (saving) versus 45 percent (spending).
A variety of demographics appear to enjoy saving their money more than spending: Republicans and Democrats, affluent and poor, educated and non-educated. There is a joy that comes from saving the fruits of our labor – perhaps because prudence is a virtue – but we don’t put it into practice.
A person’s spending and saving habits are not reflective of their views on the overall economy. “Americans who are more optimistic about the U.S. economy show little difference in enjoyment of spending or saving compared with Americans who are more negative,” Gallup stated.
The study does not actually measure saving/spending behavior and the results are not comparable to the data.
Using data from the United States Bureau of Economic Analysis, the national average savings rate is 4.3 percent, down from just over eight percent at the beginning of the economic collapse. In fact, since 2000, the personal savings rate as usually been somewhere in between one percent and five percent.
It’s understandable that some people set aside a percentage of their income: low interest rates, inflation, stagnant wages and the concept of living in the moment. There are ways to both enjoy life and be sure to have a nest egg for the future. Here are some pretty simple tips:
– Start by putting away five percent of your weekly paycheck right away by establishing an automatic savings plan.
– Every time you get a raise, put that additional money into a savings account (after a while you won’t really miss it).
– Get an old-fashioned savings jar and insert your loose change each day.
– Establish a budget, create savings goals and monitor your spending habits.
– Focus more on experiences instead of buying things that won’t make you happy or improve your lifestyle.