By Maddie Duley
In light of this data, let’s take a harder look at how Americans’ financials stack up this year compared to last and hear from some financial experts regarding the best ways for Americans to grow their savings in the new year.
Majority of Americans Have Less Than $1K in Their Savings Now
Here’s the full breakdown in savings between the two years.
Although in general Americans’ savings remained fairly consistent from 2022 to 2023, this tends to vary by age. In 2022, 45% of Americans aged 45-54 had $100 or less in their savings account, the most likely age bracket to have under $100 in savings. On the flip side, adults between the ages of 55-64 were most likely to have over $10,000 in savings, as a quarter of respondents who fell into this savings category were in this age bracket. Additionally, those over 65 are most likely to have between $2,001-$5,000 in savings.
Women are more likely to have less in their savings account heading into 2023 than men. According to the survey, 37% of women have less than $100 in their savings while only 28% of men have under $100. Men are also more likely to have over $10,000 in savings; 15% of men selected this response while only 11% of women did.
Inflation Remains the Primary Culprit
For many Americans, inflation remains the primary roadblock holding them back from saving more money.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose by 8.6% in May of 2022. With last year witnessing record highs across all essential goods and services, many individuals had to dip into their savings to accommodate the rising prices.
Having to put more money into food, gas and other necessities has led to the dwindling savings exemplified in the survey. While one-third of Americans having less than $100 in savings may seem like a shocking number, it is a product of years of financial struggle.
Saving Money Isn’t Easy — But Here Are 3 Ways To Start
Saving money in general is a challenging task to take on. Adding on high inflation rates after a global pandemic makes it nearly impossible.
“If you are living paycheck to paycheck, you just don’t have the money to save,” said Jay Zigmont, PhD, CFP, and founder of Childfree Wealth. “Additionally, those who are in debt should be putting any extra money toward their debt rather than saving, which compounds the issue.”
If you are finding putting money into savings to be an impossible task, you are not alone. It’s not too late to turn your financial situation around. Check out three ways to grow your savings in the new year.
Eliminate Debt
“In order to save more money, you need to get on a budget and get out of debt,” Zigmont said.
It’s important to prioritize eliminating debt as soon as possible so that you can build your savings and create an emergency fund.
Start Budgeting
It’s also advisable to create a plan for your money in order to stay accountable financially.
“It does not matter which budget you use, but you need to have a plan for your money,” Zigmont said. “Lock your credit cards so that you can’t use them as they can often be budget-busters. Set a goal to save a starter emergency fund of one month of expenses. The total amount will vary based upon your expenses, but a one-month emergency fund will at least get you started.”
Automate Your Savings
If you have a savings account already and want to grow the amount of money you are setting aside monthly, establishing an automated payment system can be very effective. You can use your bank’s mobile app or online platform to automatically route a portion of your paycheck to your savings account to discourage you from spending it right away.
