The American personal savings rate is at its lowest level since the U.S. financial crisis in 2008, at 6 percent of disposable income, according to the U.S. Bureau of Labor Statistics, and is continuing a 60-year downward trend line.
Increasing the personal savings rate is the key objective of America Saves Week and Military Saves Week, February 25 through March 2, a joint initiative supported by over 1500 banks, credit unions, nonprofits and other institutions, including the FDIC, the Social Security Administration, Fidelity and the Department of Defense.
“This savings crisis is putting Americans’ future financial security at risk,” George Barany, Director of America Saves, said in a statement. “We know stagnating wages and increasing costs make it hard for many Americans to make it from one paycheck to the next, let alone save for the future. But America Saves Week provides tools to help.”
America Saves Week encourages Americans to “take the pledge” to save, identify a savings goal such as college tuition, a car, or emergency fund, then create a plan to reach it.
Military Saves Week promotes the same plan for active duty U.S. service members who have a unique set of financial challenges.
Numerous activities and services are offered by over 1,500 participating organizations to encourage people to start or increase their saving, including incentivized savings accounts, encouraging the use of direct deposit and split deposits to save automatically, financial counseling and social media encouragement.
Better financial wellness
“Unexpected expenses can happen to anyone,” Kathy Kraninger, director of the Consumer Financial Protection Bureau (CFPB), said. “Having savings to absorb unplanned shocks can help people protect their financial future while meeting emergency needs.”
“The basic behavior of saving translates into spending control, budgeting and understanding the value of money,” Kevin Condon, head of consumer deposits and small business products at Bank of America, said. “By being able to save, people can move forward on the things that matter to them – from establishing an emergency fund to building a nest egg for retirement.”
“The secret to saving is simple,” Barany concluded. “People with a plan to save are twice as likely to save successfully. Whether you are saving for a rainy day, your retirement, education, or another goal, America Saves Week is the perfect opportunity to set your savings goal, make a plan, and learn how to save the most effective way—automatically.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
