20% of Americans still have no savings

[MikeInvest]

A recent report says Americans are unwary when it comes to saving or investing money. According to the latest survey by Bankrate.com, around 20% of the US working population is not in the habit of saving money, despite the boost in the economy. Why does this happen and when did this trend emerge?

[Jluke]

when credit cards were invented...


.

[prosper]

Overall, cash flow is reduced by a combination of things starting with most people's 2nd largest purchase, the car loan. A quick google search revealed the average new car loan is $30k for 68 months. When I got rid of my car loans, it reminded of how happy my wallet was before I had kids.

[disneysteve]

A quick google search revealed the average new car loan is $30k for 68 months.

This is so ridiculous. We have never even spent that much on a car and we have a 6-figure income.

Say what you will about rules of thumb but if people would follow them, they'd be so much better off. Buying a car? Your payment shouldn't exceed 10% of your monthly income for no more than 36 months. Buy a car that fits those criteria and maybe you'll have a few bucks that can go into savings each month.

People love to say, "I can't save" when what they really mean is "I choose not to save".

[Singuy]

I also feel that some Americans are not used to saving large amount of money at all so they have a hole burning in their pockets when they see 4 or 5k in their bank. I hear people say "I have lots of savings, like 5 to 6 thousand".

I know my parents would shut down all their lights, start collecting rain water, and start dumpster diving if they see 6k in their total savings.

[LivingAlmostLarge]

Many people have no idea how to save. The idea of not spending every penny coming in is outrageous

[mbrowner]

Savings easy if you automatically transfer money to a savings account when you get paid. Then you never see it so can't spend it

[greenskeeper]

Your payment shouldn't exceed 10% of your monthly income for no more than 36 months.

Disagree.

I need suckers to pay the brunt of depreciation so that when I pay cash for the vehicle used I can continue motoring debt free.

I'd suggest leasing or be certain to trade the vehicle in just before payoff, taking on another loan on another vehicle.

[Smallsteps]

I do not trust any poll or survey about savings. People lie about their situations. A large group of people are unsure of handling their finances period.
Take 401k plans, different articles have said half or more not even signed up to a plan if offered. I have had conversations with some people I know in that situation about their hesitance. It seems to be from being AFRAID of making mistakes in picking investments and savings vehicles. There are those who dig in learn and progress and then their are those who want a person or company or society to blame if things do not go well.
In my opinion people have a responsibility problem there is always a better deal or higher return many are not happy with slow and steady. They see people giving "advice" saying things like first get, insert a out of seemingly out of reach #. That makes them feel like if you can't possibly come up with a large number per month or triple their income in a month you can't do anything.
Reality is most people will need to start very small but just START.

[rob62521]

A quick google search revealed the average new car loan is $30k for 68 months.

I would say this is sad, but true, compounded by the fact that many people trade before they make that final payment and just add the balance to the next loan.

Plus, most people don't save for anything. The claim they save money because they got a deal or used a coupon, but as for actually depositing that amount somewhere and letting it grow...

[Gailete]

Reality is most people will need to start very small but just START.

Absolutely true. One of the reasons on the thread about suggesting books for those that are really poor is what I suggested. The author starts out where the person is at with the person playing something like the 'Change Game" where at the end of every day throw your change that is in your pocket into a jar with a label pasted on it, like to have enough to get yourself a treat on Fridays that might only cost $5. So something most working stiffs should be able to save up for fairly easily. But it helps get a mind set that, "Hey I really can save money for something!" Maybe you are so broke that you can't afford to go without your quarters that are in your wallet, but so you save all the other change. Do some simple math to see what you are spending on cans of Coke each day. Most vending machines charge $1 or more per can, but a 6-pack or a cube could bring the cost down to 30 cents a can if you find it on sale. so if you are used to buying a can a day at work for $1 you have spent $5 just for Coke. But if you buy a 6-pack at 30 cents a can, you have only spent $1.50 for the same amount of Coke! Then that person could put the saved money into a savings jar ($3.50) each week and perhaps this change jar is labeled dinner out. And they weren't denied anything.

Over the course of time, a person that is trying will find those cheaper ways to live life without basically making any sacrifices, then they may evenutally think that if I do without this, then I can get to this goal so much faster. Somewhere along the line, the person starts a savings account for a vacation, and as they see their credit cards go down and savings go up, by using all this little ways of saving money, you will see that you can finally feel like you can start setting aside money towards retirement, vacations, whatever trips your trigger.

One of the small things that you can do when paying off those credit card bills, is round the number up. It may mean that you only just knocked off 27 cents off the bills but as a person gets more comfortable with this kind of savings, they can start rounding up to the nearest $5 and then $10. And they are finding that because their mindset is changing, they are trying to not use credit cards, the balance on them are going down, and you are paying cash for things. This sort of thing may not work for everyone, but for those that have found themself 'accidently' in this kind of position but wanting out, there is a chance that over time, they will have savings.

Some shopaholics/spendaholics may never change. They don't want to or they simply can't without years of therapy. They may have deep rooted emotional needs to not be denied anything. I think this was the problem with my ex. He had grown up in a home where eating food without permission was a beatable offense. His dad at one point realized that someone was taking nips of his V8 juice so he put a lot of tabasco sauce in it and caught my ex sputtering with his mouth on fire. The stupid thing was, his dad didn't get to drink it either so the juice was wasted. He and his sisters lived on those little Banquet pies while his folks would go out to eat. Somewhat like those kids in CA whose parents would have food sitting around and toture the kids by not allowing them any of it. Not all spending/savings problems are money related, just a symptom of a deeply rooted problem.

[GoodSteward]

Advertisements, in America, have ruined the phrase "Save money," and with it the people have followed. Saving money no longer means building up funds somewhere to most people. Now, it means spending less on something.

"I saved $$ on my car!"
"I saved $$ on my cell phone!"

Smh. We save money all the time but never seem to have any.

[Gailete]

I also feel that some Americans are not used to saving large amount of money at all so they have a hole burning in their pockets when they see 4 or 5k in their bank. I hear people say "I have lots of savings, like 5 to 6 thousand".

I know my parents would shut down all their lights, start collecting rain water, and start dumpster diving if they see 6k in their total savings.

My MIL has been doing her sisters taxes for years. Her sister always talks about how much she has in savings. She is a widow, I'm not sure if she ever worked out so only probably has widows’ SS and her savings which sounds when she would talk about as huge. My MIL let it out one day, that it was about $50K and that was all. Considering my MIL is one that is always saying she can't afford something, the fact that she didn't see $50K as very much money was amusing to me. It is all how we look at things.

Over the past few years, I have worked very hard to get savings tucked away. The day I added it all up and realized we could live a year on what was saved felt great, but if you add in the SS it would probably be enough for 2 years’ worth of living. I know it isn't a huge amount, but a whole lot more than we had 15 years ago! On top of the savings we also paid off three different loans and credit card in the last year. Things are coming together. And the savings are adding up. I find I can pay cash for things more than I was as well.