Teaching Americans how to Pay Themselves First and Do It Automatically.

AMERICA'S SAVINGS CRISIS

Statistics on the Decline of Savings in the United States

  • Americans are saving less, taking on more debt, and declaring bankruptcy more often.1
  • Lack of emergency savings plans puts individuals in a poor financial position.
  • The decline in savings poses a potential risk to the economy.1
  • In June 2005, the rate of personal savings sunk below zero—after a virtually steady decline since 1982, when the savings rate stood at 11.2 percent.1
  • Americans are not only saving less, they are borrowing more. Household debt rates began increasing by double digits in 2003 and 2004. The debt toll is reflected in the rising personal bankruptcy rate, which doubled between 1994 and 2004.1
  • Recent studies show that only 40 percent of adult Americans have separate emergency savings funds, but that a large majority (81 percent) of those with these funds think they will be adequate to cover emergency expenditures in the future.2
  • One in three American families are using credit cards to pay for very basic living expenses.3
  • Recent newspaper stories have reported that the U.S. savings rate is the lowest in 73 years, the lowest since the Great Depression.3
  • The personal savings rate turned negative in 2005.4
  • Half of all Americans admit they are not saving as much as they should.5

Most Challenging Barriers to Savings 

  • Life expectancies are rising faster than ever before.1
  • Many of today's workers are not offered any kind of pension or retirement plan at work.1
  • Many rely too heavily on Social Security as an expectation.1
  • Many must pay an increasing share of their health coverage at the same time they're funding their children's education or supporting elderly parents.1
  • A majority of consumers feel they are not saving enough for all their short-term and long-term needs.5
  • The young, the poor, and minorities are least likely to have separate emergency savings funds. Yet those with moderate or higher incomes also feel it is difficult for them to save.2
  • There is a belief that many savings accounts do not come with high enough interest rates.6
  • Nation's homeowners have been spending more than they have been earning over the past two years and cannot turn to savings in an emergency.

Actions Americans Can Take to Overcome Barriers to Savings

  • Americans will benefit from understanding the value of accumulating savings over time, also known as the "miracle" of compound interest.5
  • Americans need access to products and tools that make it easy for them to save.5
  • Individuals need help to start saving.5
  • Households can and should build a separate emergency savings fund that is easily accumulated through automatic deposits into savings.2
  • Having savings improves consumers' flexibility, independence, and choices in managing their lives, creating peace of mind and helping them achieve their short- and long-term life goals.3
1 "Confront the Savings Crisis." Retrieved December 4, 2007, from http://www.fundingyourfuture.org/confronting/index.html.

2 Brobeck, Steve and Gillis, Jack, "National Survey Reveals Emergency Savings Needs and Effective Saver Strategies" Press Release. Retrieved December 3, 2007, from http://www.consumerfed.org/pdfs/America_Saves_Week_Press_Release_2.26.07.pdf.

3 Hogarth, J., Henson, M., Binzel, B., et al., "America Saves Week 2007 Need for Emergency Savings" Press Statements. Retrieved December 3, 2007, from http://www.consumerfed.org/pdfs/America_Saves_Week_Press_Statements.pdf

4 U.S. Department of Commerce, Bureau of Economic Analysis