Do you feel like you’re always struggling to make ends meet? Are you looking for an easier way to save money and advance financially? 

You’re not alone. Millions of Americans seek ways to save money and build financial security. Unfortunately, the American savings scene is not as rosy as you’d think. 

According to recent data, 69% of Americans report having savings of less than $1,000. Inflation is through the roof, wages are stagnant, and expenses are skyrocketing, but this doesn’t equate to forgoing savings. The key to financial success is understanding the facts about saving money to make smart decisions. Here are nine eye-opening facts about saving money to help you reach your financial goals.

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Saving is the foundation of financial security, but unfortunately, 45% of Americans have no savings at all. Building an emergency fund should be the first step towards financial freedom as it helps you avoid taking on high-interest debt to cover urgent expenses. Medical bills, auto repairs, or job loss can happen to anyone, so having that emergency fund nest egg is crucial. 

You can start with small amounts and build up gradually over time. Aim to save three to six months’ worth of living expenses so you can easily face any emergency. Start a side hustle, cut down on unnecessary expenses, and automate savings to build your emergency fund quickly.

Building an emergency fund is just the first step to financial security. Saving money for long-term goals such as retirement, college education, or a down payment on a house should be the next step. Unfortunately, 58% of Americans have less than $5,000 in savings. Out of this, a staggering 42% have $1000 or less in savings. 

The average emergency expenses costing an average of $1,000 means that most Americans are one emergency away from financial disaster. To beat the odds, develop a budget and deposit at least 10% of your income into your savings account. Track your progress to stay motivated and reward yourself when you reach your savings goals.

Following the pandemic, the average household savings rate fell to 5.1%, down from 11.9% in 2021. The stimulus checks from the government certainly helped people get by, but this also resulted in an overall decrease in the savings rate. The average American household saving rate hit an all-time high in 2020, but the pandemic aftermath has put a significant dent in this figure. 

Lack of savings could have long-term consequences down the line. Automating savings is a great way to start if you want to save more. Have set amounts of money transferred from your checking account to savings during each pay cycle.

The 50/30/20 budgeting rule is an excellent way to manage your finances. Senator Elizabeth Warren popularized this rule in her book “All Your Worth: The Ultimate Lifetime Money Plan.” 

According to the plan, you should allocate 50% of your after-tax income for essential needs such as rent or mortgage payments, healthcare, insurance, groceries, and utilities. 30% should go to wants such as entertainment, eating out, vacations, hobbies, or clothing. Finally, 20% should be put into your savings account. 

This plan makes budgeting simple and manageable while ensuring you save enough for your future. It applies to short-term and long-term goals such as retirement, college education, or a down payment on a house.

Despite the pandemic, gross personal savings in the U.S. hit $5.83 trillion USD by the end of 2020. This figure was higher than the 4.87 trillion USD in savings in 2019 and $4.567 trillion USD in 2018, showing a steady increase in savings levels. Unfortunately, gross personal savings declined after the pandemic, hitting $2.3 trillion in 2022. 

Many Americans lost their jobs, had their incomes reduced, and faced other financial hardships due to the pandemic. Saving, however, remains a critical component of financial security. Track your spending, adopt the 50/30/20 rule, and have the financial discipline to build your personal finance.

69% of Americans had saved less than $1000 in their savings account in 2019. Any major unexpected expense, from medical bills to auto repair costs and home renovations, would have thrown most people into debt. Leveraging credit cards or taking out loans from credit unions and other financial institutions may be a short-term solution with long-term implications. 

Their high interest rates could result in late payments and defaults that can ruin your credit score, lowering your chances of getting a loan or mortgage in the future. A solid financial plan that includes saving 10% of your income, tracking your budget, and making wise investments can help you build a cushion for unexpected expenses.

College education is a costly investment that can result in substantial student loans and stress for families when not planned for ahead of time. According to Sallie Mae’s How America Saves For College families spent 20% more on college in the 2021-2022 school year than 10 years ago. 

Parents need to start saving for college early, so their children don’t have to take out massive student loans or work extra jobs while pursuing higher education. Use these saving habits to help save for your child’s college education:

• Open a separate bank account and designate it as a college fund. You can deposit gifts from family and friends, birthday money, or money earned from odd jobs into the account.
• Set a savings goal and deposit regularly. Even small deposits can add up quickly when done consistently over time. Set automatic deposits from your earnings to the college fund account so you don’t have to worry about forgetting to deposit money.
• Explore tax-advantaged accounts such as 529 plans or Coverdell Education Savings Accounts. These accounts are specifically designed to help save for college. They offer tax benefits and can be used for tuition, fees, books, supplies, equipment, and other education-related expenses.

The American household savings rate in 2020 reached 16.3%, the highest in over 60 years. This uptick in savings was mainly due to the pandemic, where people felt compelled to save more money for emergencies and uncertain times. Forgone vacations, canceled events, and reduced spending due to the lockdowns also contributed to higher savings rates. 

The jump in savings may have been a silver lining of the pandemic, but it’s important to remember that saving should not be an occasional event. It should be a regular part of your budget and financial planning to ensure you are prepared for unexpected costs.

According to The Motley Fool, the average 35-year-old in the U.S. has saved $13,000 in their retirement savings accounts. It’s depressing considering Fidelity, a financial services company, suggests one should have saved two times their annual salary by age 35. This means if you are earning an average annual wage of $50,000, you should have saved $100,000 toward your retirement plan. 

The key is to open retirement accounts such as 401(k), 403(b), or IRA and start contributing regularly. Starting late means, you must save a higher percentage of your income to reach your retirement goals. Diversify your investments and consider investing in stocks, bonds, mutual funds, and ETFs to maximize returns. Take advantage of employer matching contributions and tax deductions to help you reach your retirement goals faster.

Saving money can be daunting and intimidating, but it can be simple with the right tools, resources, and strategies. Accrue Savings helps you get started with easy setup and flexible contributions toward big-ticket purchases. 

Our innovative service allows you to create a personalized savings plan, set the amount of money you want to save each month, and track your progress. Earn rewards when you shop from our partner stores and businesses, making saving for the things you want easier and more rewarding. Start your journey to financial freedom with Accrue Savings today!