SAVINGS SURVEY: GENERAL HIGHLIGHTS

Americans Think Other Americans Are Not Saving Enough

• 79% believe that other Americans are not saving adequately
• 47% believe that other Americans are saving "very inadequately"
• 86% of college-educated Americans think other Americans are saving inadequately
• 34% of Americans with incomes under $25,000 say they cannot afford to save

Most Americans Say They Are Not Saving Adequately

• 52% of Americans say they are not saving adequately
• 35% say they are saving, but not enough to meet all short- and long-term financial needs
• 17% say they cannot afford to save at all

Saving for the Unexpected

• 68% say they have adequate savings to pay for unexpected expenses like car repairs or emergency dental treatment
• 58% say they have adequate savings to pay for regular household expenses for several months if there's a job loss

Saving for Retirement

• 53% say they are saving adequately for retirement

Americans Say Economic Factors Are Barriers to Saving

• 72% cite large regular expenses as a barrier to saving
• 72% also cite unexpected expenses as a barrier to saving
• 66% cite low or unreliable incomes as a barrier to saving
• 60% cite large consumer debt as a barrier to saving

Americans Say Social and Psychological Factors Make it Difficult to Save

Americans cited the following factors as making it difficult to save:

• 42% cited "credit cards"
• 37% cited "impulse spending"
  • 46% of income groups above $75,000 cited "impulse spending"
  • 32% of those with incomes below $35,000 cited "impulse spending"
• 29% cited "spending to feel good"
• 20% cited "social pressure from friends or family"
• 15% cited "trips to the mall"
• 8% cited "playing the lottery or gambling"

Americans Cite Important Factors that Encourage Saving

• 75% say it is important, and 52% say it is very important, to have access to a contributory retirement program like a 401(k)
• 73% say it is important, and 39% say it is very important, to have easy access to a savings account paying 5% interest
• 65% say it is important, and 36% say it is very important, to have access to automatic transfers from checking or payroll deposits to savings
• Between 49% and 60% considered encouragement from one's bank or credit union, employer, and friends and family, or advice from a financial planner or credit counselor as important factors
• Between 20% and 25% considered encouragement from one's bank or credit union, employer, and friends and family, or advice from a financial planner or credit counselor as very important factors

Americans Cite Understanding Interest Compounding as Essential to Successful Saving

When told that saving $200/month at 5.00% interest over 40 years would yield over $300,000 in savings:

• 83% said this knowledge was important in persuading them to save
• 54% said this knowledge was very important in persuading them to save

Savers Identify Their Most Important and Effective Savings Strategies 

• 93% said planning and monitoring spending was important; 69% said it was very important 
• 92% cited the avoidance of credit card debt as important; 82% said it was very important
• 80% said making regular contributions to a workplace retirement plan was important; 62% said it was very important
• 78% said transferring surplus balances from checking to savings was important; 40% said it was very important
• 78% said saving a portion of financial windfalls was important; 45% said it was very important
• 76% said making mortgage payments to build home equity was important; 64% said it was very important
• 75% said having automatic transfers from checking to savings or investments was important; 48% said it was very important
• 65% said saving loose change was important; 31% said it was very important

Young Adults (18 - 24 years old) Face the Toughest Savings Challenges

• 62% of young adults (versus 52% of all Americans) said they are not saving adequately
• 54% of young Americans (versus 29% of all Americans) said "spending to feel good" was a barrier to saving
• 53% of young Americans (versus 37% of all Americans) cited "impulse spending" as an important reason they had difficulty saving
• 38% of young Americans (versus 20% of all Americans) said "social pressure from friends or family" was a barrier to saving
• 32% of young Americans (versus 15% of all Americans) said "trips to the mall" was a factor making it difficult to save

Savings Strategies Attractive to Young Adults

• 91% said it was important to understand interest compounding; 61% said it was very important
• 83% said it was important to have encouragement from friends and family; 50% said it was very important

Belief in Ability to Save $1 Million in a Lifetime

• 10% of young Americans believe they are likely to accumulate $1 million during their lifetimes
• 75% of those with high incomes (over $75,000) believe they can accumulate $1 million during their lifetimes
• 2% of those with incomes between $35,000 and $50,000 believe they can accumulate $1 million during their lifetimes
• 1% of those with incomes under $35,000 believe they can accumulate $1 million during their lifetimes

Source:  Study based on more than 2,000 respondents, conducted by Opinion Research Corp. for the Consumer Federation of America and Wachovia (November 2007).

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