Americans just don’t seem to know how to save their money, but they sure love to spend it. A Bankrate.com report found that only 24 percent of Americans have sufficient savings to pay bills for six months. A grim 50 percent of Americans have savings that can cover less than three months of expenses, reports USA Today.
The report also found that less than one-third of Americans have no emergency savings; these numbers remained stagnant for the past three years. With the skyrocketing costs of living and stagnant wages, savings have not become a priority across all socio-economic levels. For instance, less than 50 percent of Americans who earn more than $75,000 have sufficient savings.
Americans’ ability to save has declined drastically over the last 40 years. Figures from the Commerce Department show that Americans’ personal saving rate — the amount of unconsumed income — was at 2.3 percent at the beginning of this year. In 2012, the saving rate was at 5.3, adds US News.
With a sizable number of Americans being one unexpected expense away from broke, economic experts implore Americans to have at least three to six months’ worth of cash stored away at the bank.
Greg McBride, Bankrate.com’s senior financial analyst, said that “a slow-growing job market and persistent long-term unemployment are good reasons for people to save more,” says US News. If you need some help getting your savings fund started, check out our recent how-to.