Page 18 - A Guide To Financial Health (2)

Chapter 02: Starved for savings

Between declining incomes, rising costs, and profit-hungry financial

institutions, Americans simply can’'t save money. In the 1980s, the

saving rate for the bottom 90% of earners exceeded 10%. After 2011,

that dropped to around 2%. Another study found that in 2018, 58%

of Americans had less than $1,000 in savings; 32% had nothing saved at all.

This isn’t about budgeting

Despite what some “experts” would have us think, the problem isn't as

simple as unchecked spending and frivolous lifestyles. So-called

“unnecessary spending” on things like lattes and avocado toast are a

popular scapegoat for Americans’ dwindling savings accounts. This narrative

is pervasive because it's visible, convenient, and less uncomfortable than the

truth.

The reality is, savings rates are flagging despite Americans’ best efforts.

U.S. Financial Diaries’ Savings Horizons research shows that people are

saving money—but it gets wiped out over and over again. Income

fluctuations and unforeseen expenses cause people to continually dip into

their savings, depleting what’ s there, and forcing them to start all over

again.