30% of Americans Have No Savings
If you lost your job today, would you have enough money to survive for six months? At least 30% of Americans today would answer “no” to this question. A shocking 28% of Americans reported having no emergency savings at all!
Only about 25% polled in a national survey of 1,000 people (although 9% did not know or decline to respond to the question) indicated having savings equivalent to six months' salary – most financial planners advise their clients harbor at least that amount in savings in case oh job insecurity or other emergency situations.
However, due to the recent recession, most financial advisers are now encouraging clients to have enough money stashed away in order to accommodate for a full year's worth of living, in case of emergency.
But due to the weakened economy, Americans just can't afford to save like they used to. It's no wonder the majority of America's working class is now more stressed than ever...should they lose their job or house, many of them would desperately find themselves up a creek without a paddle in no time.
According to Bankrate's Financial Security Index, the number of Americans currently living with no savings has spiked from 24% to 28% in just one year's time. What gives?
Robert Fuest, chief operating officer and head of investment research at Landor & Fuest Capital Managers in New York believes that recent decline in debts in American households likely came at the expense of savings. People are more aptly paying off their debts, but that means they are also sacrificing their savings accounts.
From Fox Business:
"Many Americans used debt to fund about 20% of their lifestyle choices. They were running cash-flow negative, in essence," Fuest says.
Scaling back spending doesn't happen overnight, particularly in a society where the economy is powered by ever-increasing consumer demand.
It can take some time to change the mindset that leads to overspending, but there's an easy shortcut to boosting savings: automation.
The chart below features full results from the Bankrate survey:
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