Would it surprise anyone to learn that most Americans are not satisfied with the amount they have saved?
Let’s take look at some of the key findings in the recently published Yahoo Finance/Marist Poll 2025 National Survey on the State of Savings:
- Only 10% of households are completely satisfied with the amount of money they have saved.
- Only 20% reported saving more in 2024 than in 2023.
These numbers are scary. You can read more here. The scariest part for me is that these results aren’t surprising at all. They closely mirror the stats I first showed my students back in 2021 when discussing savings.
Why are these numbers so scary?
In the abstract, I can understand why these stats may not seem too scary to you.
Let’s look at another stat that illustrates what happens when we don’t have adequate savings:
- About 33% of households would not be able to pay their bills or expenses for one month, if faced with a sudden loss of income.
- This number rises to 38% of Gen Z and 41% of Millennials who report they could not pay their bills for even a month.
What do these numbers mean?
1 in 3 people currently reading this post, in the comfort of their homes they have worked so hard for, would not be able to afford those homes for even one month if they suddenly lost their jobs. It’s worse for Gen Z and Millennials.
Maybe you’re on the train commuting to work while reading this. How many people are in the train car with you? 30 or so? Pick out 10 passengers, really look at their faces.
They’re just like you, typically good people, working a job to provide for themselves and their families. If these 10 people suddenly lost their jobs, they wouldn’t be able to pay their bills next month.
Count me in the group of people not completely satisfied with their savings.
If you read these stats and are honestly not worried about your savings, you are in the minority and are doing a tremendous job managing your personal finances.
Keep up the good work and please let us know in the comments below what strategies are working for you.
On the other hand, if you’re being honest with yourself, you’re most likely in the 90% of people that are not completely satisfied with their savings.
Count me in this group.
From 2017 to 2024, my wife and I prioritized using all of our available money to acquire real estate. The downside was limited funds available for savings.
We now have work to do to build our savings back up. Instead of presently shopping for investment properties, we are now focused on paying down mortgage debt and increasing our savings.
Most people attribute their low savings to rising cost of living.
What is the most common explanation given by people that have so little saved? Rising cost of living across the nation:
- Nearly 66% of Americans believe that the cost of living for the average family is not affordable in their area.
Millennials and Gen X are the most worried about the cost of living, with more than 70% of each group feeling unprepared. 64% of Gen Z and 59% of Baby Boomers likewise feel unprepared.
Cost of living includes necessary expenses like housing, food, transportation, and healthcare. In other words, Now Money.
There are any number of reasons we can point to that are combining to drive up the cost of living, like limited housing inventory, higher interest rates, and more expensive groceries.
Whatever the reason for why costs are going up, I’m more interested in adapting and thriving in the current environment rather than making excuses.
So, what exactly can we do to improve our savings?
We can first eat Italian beef while working on our money mindset.
Then, we can create a Budget After Thinking that fuels our goals.
The next part, figuring out what to do with that money you generated for savings, is much easier. Before we talk about specific savings tips, let’s make sure we’re on the same page as to what we are trying to accomplish through saving.
Savings are for short term protection and short term goals.
When we talk about savings, what exactly are we talking about anyways?
According to Merriam-Webster, saving means “the preservation from danger or destruction: deliverance.”
Uhh, that’s intense.
Scrolls down…
Savings (pleural) means “the excess of income over consumption expenditures.” Much better.
That’s about as simple as it gets. Savings is the money you have left over that you didn’t otherwise spend. In Think and Talk Money vocabulary, it’s your Later Money.
In The Richest Man in Babylon, George Clason described savings with one of my favorite quotes in all of personal finance:
“A part of all you earn is yours to keep.”
Translation: you worked hard to earn that money. You should think about keeping some of it.
Actively saving money to fuel your Later Money goals is a non-negotiable step towards financial independence.
You can use your savings to protect yourself and your family in times of need. You can also use your savings for short-term goals, like paying for a wedding or a downpayment on a house.
Think of it this way, your savings make it so all those hours you spend on the job- the time away from your family or your passions- was not for nothing.
What is the difference between saving and investing?
Keep in mind that savings is different from investments, although both count towards your Later Money.
Savings is for (1) short term protection and (2) short term fuel for your life goals. Your savings is your security blanket for the here and now so you don’t have to take away from your wealth-generating investments at the wrong time.
Keep this money in a dedicated savings account (or accounts) so the money is readily available when you need it.
There is very little, if any risk, involved with saving money. That’s because reputable banks in most countries carry deposit insurance to protect your money. In the United States, deposits are protected up to $250,000 by The FDIC.
So, how are savings different from investments?
Investments are assets that you purchase with the goal of making a profit over time. That might be through the stock market, real estate, or any number of other options. Think of investing as the best way to supercharge your wealth over the long term.
Investing is a major component of overall money wellness, but investing comes with risk. As the saying goes, “you don’t get something for nothing.”
Because you can lose your money in any investment, it’s not a good idea to expect that money will immediately be there when you need it. That’s one reason why you should have savings distinct from your investments.
One way to counteract investment risk is to invest for the long-term, so you don’t want to interrupt those investments for short-term goals. This is another reason why we need savings in the short term.
One final point about saving vs. investing. There is a point when you will have enough saved in the bank that you can solely focus on growing your investments. This is a very comfortable place to be and where I am currently focused on returning.
Saving is an essential part of overall money wellness.
To recap, saving money to fuel our Later Money goals is crucial to overall money wellness. Sometimes, we’ll use our savings for protection, like in times of emergency. Other times, we’ll save with a clear goal in mind, like paying for a wedding or a house.
Saving is not the same as investing, although both are important. The reason we save money, rather than invest it, is so that money is readily available when we need it.
In our next post, we’ll discuss what to do with the money we are saving for maximum results. We’ll cover some key strategies for what to do with the money you have generated so your savings align with your overall money goals.
Let me know in the comments below if you’re not completely satisfied with your savings, like me.
Have you taken any steps to join the 10% of Americans who are completely satisfied?
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