The 20% of Americans still have no savings

A recent report says Americans are unwary when it comes to saving or investing money. According to the latest survey by Bankrate, around 20% of the US working population is not in the habit of saving money, despite the boost in the economy. Why does this happen and when did this trend emerge?

Comments (59)

Mar 16, 2018

Hi MikeyInvest, any of these topics helpful:

  • "If You Have Savings In Your 20s, You're Doing Something Wrong" of those individuals do not have defined benefit pensions to fall back on either. You can dream that ... what??????? See Full article here: http://elitedaily.com/life/savings-20s-something-w... savings ... experiencing with this trash. Most of this I feel like is propaganda for people with liberal arts degrees that ...
  • 20% of pay into 401 K? Anyone else do this? For whatever reason, I've started to put 20% of my pay into a 401K account, mostly small cap, ... question is whether anyone else recommends this, or whether they would themself have a traditional savings ... of the compounding returns? Basically, giving a little sacrifice now to get a return in 35 years? My ...
  • Trade-offs: Demotion in title for a 20% raise and a "better" company recently approached about an Analyst role at a very well known F500 company. I have just over 3 years of ... post-college experience, and am by no means hurting in terms of compensation in my current role. The new role ... would offer a 20% increase in base pay and 10% increase in bonus in exchange for an effective demotion ...
  • 20% Down on a Home? Try 3%. a boost to first-time home buyers, who have largely stayed on the sidelines of the housing market rebound. ... National Assn. of Realtors. "First-time home buyers have had trouble, and a lower down payment always ... half of all new home loans from banks and package them into securities for investors. But lenders still ...
  • PREDICITION: Apple to lose 20% of current smartphone market share by 2020 Thoughts? I have noticed a general shift in sentiment. This could just be my own social circle but ... it reminds me of Instagram's introduction of stories and the shift away from Snapchat. Once the ...
  • 12 Average Americans: Should we still have the jury system? disheartened by this. Your fate is being decided by 12 average Americans. These are the people who were unable ... to successfully dodge jury duty. Should we really trust the "wisdom of the masses" in ... this contributes to the rise of settlements and arbitration/mediation? Or is that just a response to ...
  • FB Pops 20% after Earnings my latest foray into betting against FB (first 2 times I made 25% and 150%). I am thinking of selling ... I still dont see how market cap can be over $50BN here. Thoughts? Facebook ...
  • More suggestions...

Calling relevant pros to the rescue! @Alex-Wise @Vincejackrox @Vincejackrox

You're welcome.

Mar 20, 2018

because avocado toast.

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Mar 22, 2018

stfu you entitled baby boomer snowflake. You can pry my avocado toast out of my cold dead millenial hands!

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Mar 22, 2018

U literally ruined the housing market ): I can't have a 5 bedroom house in the suburbs because I work in some bitch government department

Mar 20, 2018

I actually fail to believe this. Not sure how people even get up in the morning and/or not end their existence. Hell, I have a good amount of net worth and still think about dancing with the reaper a few times per week.

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Mar 21, 2018
MonacoMonkey:

I actually fail to believe this.

It's even worse if you break it down by generations. Almost half of "young millennials" have literally zero savings.

Mar 21, 2018
CRE:
MonacoMonkey:

I actually fail to believe this.

It's even worse if you break it down by generations. Almost half of "young millennials" have literally zero savings.

Check their debt.

It's one of those issues where I'm so glad I'm not an American, especially considering I'm a millennial.

Mar 22, 2018

I see it. People my age working crap jobs spend their income on supposed status items like big holidays or renting in nice areas etc. Thats all good and well unless you are saving nothing, I think similar to what MonacoMonkey said it would be soul destroying living pay check to pay check.

Mar 22, 2018

This is probably the best comment I've seen from you Mon.

Mar 21, 2018

Back home, which is down yonder a lot of people work for $22/hr or less. Construction or manufacturing jobs.

Mar 21, 2018

$22 * 40 hours per week * 52 weeks per year = $45,760. If you're making $22 / hour in anywhere that isn't a tier-1 city, you're probably doing decently. At the very least, you should be able to save a bit of your wage that puts you outside of this 20%.

The people who have no savings are by and large those who make much less (i.e. $7-12 / hour) and people that live outside of their means.

Mar 21, 2018
The Real Max:

... and people that live outside of their means.

Really the whole reason that people don't save

Mar 21, 2018
ironman32:

Really the whole reason that people don't save

No, it is a reason, not the only reason.

Student loans, the changing employment landscape, never being taught financial literacy in school, etc. all contribute to the lack of savings.

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Mar 21, 2018
The Real Max:

$22 * 40 hours per week * 52 weeks per year = $45,760. If you're making $22 / hour in anywhere that isn't a tier-1 city, you're probably doing decently. At the very least, you should be able to save a bit of your wage that puts you outside of this 20%.

I hate to be "that guy," but where is making $45k a year "doing decently" and not "the absolute bare minimum?"

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Mar 21, 2018

70.23% of Americans make less than $50k / year. I don't know what fantasy land you live in where earning what the vast majority of Americans earn is the "bare minimum." It's easy to have a warped perspective of "normal" income when you're viewing a forum board skewed towards undergrads and people early in their career gunning for an entry level position that pays $150k.

https://en.wikipedia.org/wiki/Personal_income_in_t...

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Best Response
Mar 21, 2018

Relax. I'm perfectly capable of being wrong and/or needing perspective without "living in a fantasy land."

I would argue that while the % that make less than $50k a year isn't irrelevant, it also isn't entirely relevant either. A single person at $50k is a lot worse off than a couple at $50k each. A 65 year old person in the middle of Iowa who has owned their house for 15 years is probably pretty set on $50k. A recent grad 23 year old in a "Tier 2 city" with $100k student debt making $50k probably isn't, regardless of how much avocado toast he or she buys.

I've also made that much before, personally. It was quite literally "the bare minimum" given the price of rent, student loans, etc. I'm not pulling this out of my ass.

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Mar 21, 2018

I would also argue that a good amount of those 70% that do not qualify for government assistance are struggling. If you qualify for government assistance or have a spouse making $45-50k then you can probably be ok (relatively).

I'd imagine it would be difficult to make $42k/year - $800/week GROSS. After taxes and insurance that's probably in the ballpark of $2k/month. What could you realistically save in this scenario $100 or $200/month? Healthcare/ health insurance is the real wild card here and if you have a kid, forget about it.

It's easy to lose perspective (I do it often), but life is tough for a lot of Americans. I certainly feel that I've worked hard and earned my place in life, but I pay more in daycare expenses a month than over 70% of americans take home - thats tough.

twitter: @CorpFin_Guy

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Mar 21, 2018
The Real Max:

70.23% of Americans make less than $50k / year. I don't know what fantasy land you live in where earning what the vast majority of Americans earn is the "bare minimum." It's easy to have a warped perspective of "normal" income when you're viewing a forum board skewed towards undergrads and people early in their career gunning for an entry level position that pays $150k.

https://en.wikipedia.org/wiki/Personal_income_in_t...

I wouldn't care if it was 95% that earned that wage or less. That's a lot below the 'bare minimum' from my perspective.

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Mar 21, 2018

$45K per year median for the full-time worker - and a bit higher at around $55K per year in the Bay Area. A double-income household who both work full-time and who each is purely average is completely functional.

Mar 21, 2018

I inherited wealth and parlayed that into more investing and savings.

Read "Capital" by Thomas Piketty.

I made 53K base, no bonus in my first year of corporate. I still saved 30% of after-tax income - in the Bay Area. I also lived an austere lifestyle. I also make a lot more now and my spending has not kept up. So my savings rate is even higher, even accounting for b-school tuition/fees to pay off.

In San Francisco where I live, it is easy to blow through 3K a month in rent. It is especially important in a city like this to save while working a high-income job. Too bad many of my friends don't have financial literacy.

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Mar 22, 2018

You remind me of a friend of mine from high school, UCLA Anderson. You were able to save around 10-12k even with the bills?

The urge is strong to blow...I agree.

No pain no game.

Mar 22, 2018

I lived in Berkeley in a 2 bedroom-2bath and paid 700 for my share. What a piece of shit apartment hearing my neighbor bang athletes in the middle of the night! I traveled 30% and hardly paid for food then.

Mar 21, 2018

And the shitty part is, when our generation gets to retirement age and all these dickheads realize they have no savings, they're gonna cry to big brother with indignation about it and the people who did earn a good living and contribute to their savings all along are going to pay for it in one way or another.

Coming from a millennial, our generation SUCKS. When things don't go our way, instead of picking up a hammer and a nail, we pick up picket signs and try to force the world to bend to our selfish needs instead of just getting a job, paying off loans and putting something in the bank for retirement.

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Mar 21, 2018

America's entitlement and pension systems are already enormously underfunded. Not only is a large contingent of our generation crying for handouts, groups like AARP are fighting to ensure we keep pouring endless taxpayer dollars into social security, medicare, medicaid, and government pension plans.

Mar 22, 2018

Yeah, if you ask me our government should try and roll back the 54% of our national tax revenue that they spend on military might and divert some of it toward education, infrastructure, affordable housing and healthcare. Give people the proper tools they need to succeed and then from there if they can't figure it out, it's their fault.

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Mar 21, 2018

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Mar 22, 2018

Notice, that for the most part, anything that involves the government = huge inflation.
It (government) is the root of all (non-bodily) harm and evil in this world.

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Mar 21, 2018

Rampant consumerism and the associated dopamine rush in many people prevent them from saving. Factor in cash back cards and promotions and they just can't resist...

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Mar 22, 2018

Well, I keep most of the monies in the checking account...0.001% can lick it

Mar 22, 2018

I come from the midwest and I think most people would be shocked by how little knowledge and interest people in rural america (midwest & the south specifically) have in general aspects of personal finance. Match that with the lower income areas surrounding every major city, and the amount of millennials coming out of undergrad racking up credit card debt while they struggle with student debt payments most of them will be paying off until they are 50, I think the 20% is actually very conservative....

Mar 24, 2018

This is a good point.

I feel a lot of times people hear argue like everyone is an MBA with a CFA and should understand concepts. I remember some comedian said the "south" is anywhere 20 miles outside of a city, and while that's a joke it's somewhat true. The town I grew up in is an hour outside of NYC, but my friends who are still there make some dumb financial decisions that I have to hold my breath when they talk to me.

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Mar 22, 2018

You can 100% know the value of a degree before paying for one. This comes down to people living outside their means.

To Quote @ironman32

I define "living outside of your means" as making X (paycheck), but living a lifestyle of X+1. The equation to save is really X-1. We can define Y as how much we think someone needs to live, but that's different from X, but living outside of your means is how people get into debt, i.e. don't save.

For example, students loans only occur because people "buy" a school they can't afford, i.e. take on debt.

People not having the skills to save, i.e. based on career path or their knowledge of savings, are also someone separate arguments, but I feel they still fall under living beyond their means. Essentially, if someone cannot manage 50K how they will be able to manage on 60K? (someone people will spend all they have no matter what) Financial literacy can somewhat be an excuse, but I feel that people know they need to save, they just don't (same with eating correctly). I don't think everyone can exactly explain what a mutual fund is, or know how the market works, but we do have the Internet where someone can figure out how and why to build a budget in about 10 minutes.

I agree with these thoughts. You can with decent accuracy know what you're going to make doing a certain job before getting a degree. So I would argue student debt also falls under living outside one's means.

Mar 24, 2018
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Mar 28, 2018
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No pain no game.