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Mar 18 2011

Americans saving money

How Much do Americans Save?

Americans are notorious for failing to put aside money for tomorrow. The median household income in the U.S. is $50,000. This pushes the taxpaying household into the 25% bracket. Adding back the average $3,000 tax refund, the median household disposable income is $40,500 a year.
On average, Americans spend 94% of their disposable income, leaving only 6% for all savings accounts combined. Using the median household income, this means the average household in the U.S. only puts $2,400 total away. That’s $200 a month towards retirement, college, and saving for a home. Not only do most American households fail to save enough, but nearly half – 43% – spend more money than they earn, putting themselves into debt they can’t pay back.

Remember that 6% of disposable income being saved on average? That figure is not proportionately spread, as only 41% of Americans save regularly, leaving more than half as sporadic or non-savers.

Have Americans always had these poor saving habits? While they’ve regularly fallen behind on savings, there have been savings highs and lows in the past. Naturally, the Great Depression was a bad time for savings. Not only were Americans not saving, but the average savings rate during 1932 was a negative 1.1%, meaning Americans spent 1.1% more money than they had. While 1932 showed a low point in savings, 1944 showed a high point in savings in the United States. During World War II, the savings rate soared to 26% of disposable income. For the most part, the savings rate in the U.S. has hovered between 5 and 10%.

So, how do the saving habits of Americans compare to those abroad? The average Chinese worker saves a whopping 30% of their income, while the Swiss save 14% and Germans save 13%. There’s an obvious gap between U.S. savings and other countries.

Why do Americans ignore the future when handling money? American culture is different from other cultures. In the U.S., there’s an attitude of needing to have things now even if you can’t afford it. Credit cards help people secure items they want immediately. Once credit card debt is racked up, many Americans turn a blind eye to their debt and pretend there isn’t a problem. People in the U.S. also need to constantly compare themselves to their friends and neighbors, being sure to have the biggest, best unnecessary toys they can get.

How can you find a career that pays enough to buy what you need and want and still have money to save? Take a free career aptitude test! A career assessment test can pinpoint your strong points and ensure you go into the field that is most lucrative for you. Don’t get caught without savings – take a career aptitude test today and be on your way to a rewarding career.

By Career Explorer