One In Four Americans Have Savings Below $1,000. Here’s How To Make The Most Of Your Savings. (2024)

A Note From Patricia:

Hello and welcome to Forbes Advisor’s Weekly Brief, where each week we dive into the realities of consumer finance and empower you with knowledge to help make your financial journey easier.

The rising cost of living, high interest rates and other financial challenges have made it increasingly difficult to save money. More than a quarter of Americans (28%) have less than $1,000 in savings, according to a new Forbes Advisor survey. With persistently high inflation, it is more important than ever to have a financial safety net.

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In this week’s brief, we’ll discuss why Americans are having difficulty putting money away, as well as offer a few tips to help you boost your savings.

Sincerely,

Patricia Louis

Editor, Forbes Advisor

One In Four Americans Have Savings Below $1,000. Here’s How To Make The Most Of Your Savings.

Many Americans are struggling to make ends meet, let alone boost their savings, in the face of high inflation.

Personal savings as a percentage of disposable personal income was just 3.6% in April 2024, compared to 4.1% a year earlier, according to the Bureau of Economic Analysis, illustrating how difficult it is for Americans to save.

Nearly half of respondents in a Forbes Advisor survey anticipated only being able to save either the same amount of money, or less, this year as the year before. Most respondents pointed to the rising cost of living as the predominant obstacle to saving more.

Not having a financial safety net can be disastrous in the event of unexpected expenses. Fortunately, the majority of respondents (59%) said they would use savings to cover a cost that exceeded their budget. However, that’s cold comfort to the many Americans who have less than $1,000 at hand.

If your savings account is lacking, consider employing the following strategies:

• Get a rewards checking account: If you use your debit card on a daily basis, consider getting a rewards checking account to maximize your spending and earn rewards that can be put towards saving, such as cash back, interest or a bank bonus from signing up.
• Automate your savings: By scheduling automatic transfers from your checking account to your savings account, you can help reduce the temptation to overspend. Some money-saving apps even offer round-up transfers on debit card purchases. Make sure you take steps to ensure you don’t overdraw your account as a result.
• Park your cash in a high-yield savings account: These accounts offer higher interest rates than traditional savings accounts and are typically offered by online banks. Some of the best high-yield savings accounts earn an APY of at least 5%— much greater than the national average savings account rate of 0.45%, according to the Federal Deposit Insurance Corporation (FDIC). Look for an account that has no or a low minimum deposit requirement for opening.

For more surprising statistics on how much Americans are saving and some helpful tips on how to make the most of your money, read more here.

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