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).