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Americans Keep Their Eye On Savings In 2018

[Wednesday, March 7th, 2018]

Putting money away in savings is difficult for many people, but for folks who make less than $40,000 a year, or who don’t have a college degree, it’s even harder. That’s according to a recent survey by PenFed Credit Union, which found that the majority of American adults have less than $5,000 stashed away in savings.

There is good news, however. The survey showed that people are feeling optimistic about saving more money during the upcoming year, regardless of their income or educational status.

The survey, which was conducted online in February 2018, included responses from 1,000 people ages 18 and over. Participants were asked about how much money they have in savings, how frequently they set aside money, and how they feel about their prospects for saving more in the future.

The savings gap

The average amount that respondents had in savings was $8,700. But don’t let that number fool you: the majority of people (62%) have less than $5,000 put away. One in five has over $20,000 in savings, meaning there’s a significant gap in how much folks are able to save. That gap is widest between households that make more than $40,000 or less than $40,000 a year. Those in the $40,000+ group have average savings of $12,200, while the sub-$40,000 group has only $3,100 on average.

College graduates and those without a college degree also have a split in the amount they have put away: college grads have more than double what non-grads have ($13,100 versus $5,200).

Optimism and financial management

Despite the dismal figures for average amounts saved, most folks say they do put money away every month (61%). Only one in five claim to never save money. And a little over half of survey respondents (51%) say they plan to save more in 2018 than they did last year. Thirty percent expect to put away about the same amount.

Financial advisors say it’s wise to have money put aside in case of an emergency: preferably about six months’ worth of living expenses. One way some people choose to save money is by putting funds into a prepaid card account, where the money will be available to them in case of emergency. Using prepaid cards and debit cards is another popular way to avoid going into debt on a credit card, which allows for putting money into savings rather than spending it on interest charges.

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