Google Consumer Surveys found that almost two-thirds of Americans are “savings poor,” with less than $1,000 in their savings accounts. About one in five are so broke they have nothing saved.
Google Consumer Survey for the Los Angeles-based GOBankingRates.com, which publishes the best personal deposit interest rates to a million subscribers each week, found that 62 percent of Americans do not have $1,000 in savings. About 13 percent have less than $1,000; 9 percent the bare minimum to keep the account open; 28 percent have $0 in a savings account; and 21 percent do not have any savings at all.
For those Americans with the discipline or capability to save at least $1,000, about 10 percent have between $1,000 and $4,999; 5 percent have between $5,000 and $9,999; and only 14 percent have more than $10,000.
Dave Ramsey is America’s top cheerleader for getting out of debt and beginning to save. With over 4.8 million books sold, 140 weeks on the New York Times Bestsellers List, and broadcasting on 500 radio stations he advocates daily to tens of millions of broke Americans the wisdom of the Bible for personal finances:
“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.” –Proverbs 21:20
Ramsey says that the “secret to saving money is to make it a priority, and that is done only when you have some healthy anger or fear and then focus that emotion on your personal decisions. Harnessing that emotion will make you move yourself to the top of your creditor list.”
A surprising result of the GOBankingRates.com is that it is not just the irresponsible youth that have only $50 or less in savings. About 44.2 percent of millennials aged 18-34 years old, as would be expected, have $50 or less in savings. But seniors were the worst demographic, with 49.2 percent having $50 or less in savings.
The 86 percent of American men and women that are “savings poor,” with less than $10,000 in an account, report similar savings rates. Women were slightly more likely to have a savings account with “just the minimum balance requirement” than men. But of the 14 percent of “savings rich” Americans with over $10,000 in savings, 60 percent were men and 40 percent were women.
The Google survey’s results are very similar to an earlier survey by Bankrate.com that found that 62 percent of Americans had virtually no emergency savings to pay for a $1,000 medical emergency or even a $500 auto repair. About 57 percent of the Bankrate.com respondents said they had wiped out what little savings they had during the Great Recession, despite the recession officially ending in October of 2010.
One of the main reason Americans claim for not being able to save is that they have suffered stagnant wage growth during a period of high inflation.
Although the U.S. Commerce Department’s official consumer price index rose by just 0.8 percent in 2014, the closely-watched Chapwood Index, which measures the actual cost of inflation for individuals in America’s 50 largest cities, found that cost of living increases for city dwellers spiked by 12.4 percent.
Cameron Huddleston, a columnist and personal finance coach at the GOBankingRates site, commented, “It’s worrisome that such a large percentage of Americans have so little set aside in a savings account.”.He added, “It suggests that they likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends, and family, or even their retirement accounts to cover unexpected expenses.”