Despite a strong economy, a majority of Americans seem to be struggling to save money, according to GOBankingRates’ sixth annual savings survey.

Since 2014, GOBankingRates has polled Americans to find out how much they have in a savings account. This year, GOBankingRates asked adults from across the U.S. six questions to learn about their savings habits and what obstacles are keeping them from saving more. The results show that, compared with previous year’s findings, there’s a growing percentage of people with little to no savings. In 2019, 69% of respondents said they have less than $1,000 in a savings account compared with 58% in 2018.

“It’s puzzling to me that if the economy is doing so well and that we’re so close to full employment, that consumer confidence is up … that we haven’t seen the numbers move much in people’s ability to save,” said Bruce McClary, spokesman for the National Foundation for Credit Counseling, which conducts an annual financial literacy survey.

The survey looks closely at the following topics:

Key Findings

Almost half of respondents — 45% — said they have $0 in a savings account. Another 24% said they have less than $1,000 in savings.

Another 24% said they have less than $1,000 in savings. The top reason respondents said they weren’t saving more was because they were living paycheck to paycheck. Nearly 33% said this obstacle was keeping them from saving, and about 20% said a high cost of living prevented them from saving more.

Nearly 33% said this obstacle was keeping them from saving, and about 20% said a high cost of living prevented them from saving more. The No. 1 thing respondents said they need to save more money was a higher salary. About 38% said having a bigger paycheck would help them save more, while 18% said lowering their debt would make it easier to set aside cash.

About 38% said having a bigger paycheck would help them save more, while 18% said lowering their debt would make it easier to set aside cash. The most common place where those with savings put their cash is in a savings account. Although 33% of respondents said they take advantage of a savings account to store their cash, 29% said they don’t have any savings.

Nearly 70% of Americans Have Less Than $1,000 in a Savings Account

The survey found that setting aside money seemed to be harder for Americans in 2019. In 2017, 57% of respondents said they had less than $1,000 in savings. That percentage edged up slightly to 58% in 2018.

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This year, it shot up to 69%. Included in that figure are the 45% of respondents who have absolutely nothing in a savings account. The percentage of respondents with $0 in savings hasn’t been that high since 2014, when GOBankingRates conducted its first savings survey.

“I find it very troubling that people can’t come up with $1,000 in a savings account to cover expenses without borrowing money,” McClary said. In fact, having $1,000 in savings wouldn’t create enough of a cushion to cover many emergency expenses. That amount would just be “the starting point in the journey for achieving financial security — it shouldn’t be the final goal,” McClary said.

How Much Money Do You Have in Your Savings Account? Demographic $0 Less than $1,000 $1,000-$4,999 $5,000-$9,999 $10,000-$19,999 $20,000-$49,999 $50,000 or more Ages 18-24 41.13% 26.24% 14.18% 6.38% 5.67% 2.13% 4.26% Ages 25-34 50% 21.15% 14.42% 3.85% 5.77% 1.92% 2.88% Ages 35-44 40.91% 29.09% 12.73% 3.64% 5.45% 1.82% 6.36% Ages 45-54 53.29% 20.39% 9.87% 5.92% 2.63% 2.63% 5.26% Ages 55-64 40.24% 26.22% 13.41% 3.05% 7.32% 3.66% 6.10% Women 50.56% 22.94% 10.24% 4.23% 4.01% 2.90% 5.12% Men 38.29% 25.44% 13.10% 5.29% 6.30% 4.28% 7.30%

Women and middle-aged adults appear to be having the most trouble saving money. The survey found that 51% of women versus 38% of men have $0 in a savings account. And 53% of respondents ages 45 to 54 have no savings — the highest percentage of any age group.

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A Quarter of Americans Are Focused on Retirement Savings

In addition to finding out how much (or how little) Americans have in savings, the survey sought to explore why people are saving. When asked what they are primarily saving for in 2020, 26% of respondents said “retirement” — making it the top savings goal.

Older adults were much more likely to be saving for retirement than younger respondents — with 74% of respondents ages 55 and older saying they were primarily saving for retirement. Men were slightly more likely than women to be saving for retirement — 28% versus 23%.

Boosting retirement savings is a great goal. But it can be risky to build a nest egg without first creating an emergency fund, McClary said. Without cash for unexpected expenses, people end up raiding their retirement accounts — which is a big mistake because you have to pay an early withdrawal penalty and taxes on the amount you take out of a retirement account such as a 401(k) or IRA, he said.

The survey found that 19% of respondents are saving for an emergency fund, making it the second-most popular savings goal after retirement. The survey also found that Americans are more likely to be saving for a vacation than for a car, home or an education.

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Cost of Living Is Keeping Americans Down

One of the top reasons respondents said they aren’t saving more is because the cost of living is high where they are. It seems to be more of a problem this year, with 20% of respondents saying cost of living was an obstacle to saving compared with 18% in 2018.

“[Cost of living] is a legitimate obstacle for people in parts of the country,” McClary said. As the cost of living rises in many cities, people’s budgets are getting tighter and tighter, leaving them with less cash to set aside for savings.

However, the biggest obstacle to saving is living paycheck to paycheck. Nearly 33% of respondents said this was preventing them from saving more — up slightly from 31% in 2018.

Adults ages 35 to 44 were the most likely — at 40% — to say that living paycheck to paycheck was keeping them from saving more. And women were much more likely than men to be facing this obstacle — 38% versus 27%.

What Obstacle(s) Are Keeping You From Saving More Money? Response Women Men I’m living paycheck to paycheck 38.31% 26.70% I’m unemployed 23.39% 24.43% The cost of living is high in my area 18.71% 20.91% I have too much debt 14.92% 17.63% I forget to put money into savings 6.24% 7.81% I don’t know how to budget 7.35% 10.08% My savings account earns a low interest rate 9.58% 14.11% Other 10.02% 10.08% Note: Respondents could select multiple answers.

Living paycheck to paycheck is a symptom of a bigger problem, McClary said. “It often is the result of an individual who doesn’t have a spending plan and they’re not tracking what they spend, they’re not tracking their income. Because of that, things often fall off the rails.”

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Simply taking the time to sit down and put together a budget can often help people break the cycle of living paycheck to paycheck, McClary said. Although the survey found that 9% of respondents said not knowing how to budget was keeping them from saving more, there might be a much higher percentage of people who aren’t using a budget to help them reduce spending and save more. The National Foundation for Credit Counseling’s 2019 Financial Literacy Survey found that less than half of Americans said they have a budget and keep close track of how much they spend.

Americans Need Higher Salaries to Save More

Considering that living paycheck to paycheck was named the top obstacle to saving, it’s not surprising that the top thing respondents said they needed to save more money was a higher salary. About 38% of respondents said that having a bigger paycheck would allow them to save more.

It is somewhat surprising, though, that younger adults weren’t most likely to say they needed a higher salary to save more. In fact, adults ages 35 to 44 and ages 55 to 64 were most likely — with 44% of both groups — to say that earning more would help them save more. An equal percentage of men and women — about 38% — said having a higher salary would allow them to save more.

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Lowering debt was the second-most common thing respondents said they would need in order to save more — with about 18% choosing this option. Although respondents said a high cost of living was one of the top obstacles to saving more, only 9% said moving to an area with a lower cost of living was the No. 1 thing that would help them.

What Is the No. 1 Thing That You Need in Order To Save More Money? Response Women Men A better savings account with a higher interest rate 5.57% 8.56% A higher salary 38.53% 38.04% Someone to help me 3.12% 4.28% To have access to a savings account 2.90% 4.53% To learn better budgeting skills 9.35% 6.05% To lower my debt 16.04% 19.65% To move to an area with a lower cost of living 9.13% 8.56% Other 15.37% 10.33%

Americans Prefer Savings Accounts, but Many Don’t Have Any Savings

The survey found that respondents who are saving are most likely to store their money in a savings account versus a money market account, CD account, non-interest or interest-bearing checking account, or physical piggy bank or safe. About 33% of respondents said most of their savings are in a savings account. However, an almost equal percentage of respondents — 29% — said they don’t have any savings.

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A savings account can be a good place to store emergency funds because the money is easily accessible. But it’s not a place to put retirement savings because interest rates on savings accounts are relatively low. For long-term savings, accounts such as a 401(k) and IRA are better because of the tax benefits they offer. They also allow you to invest in stocks or stock mutual funds, which tend to offer a higher rate of return than traditional savings accounts.

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How Americans Can Save More

Although the survey found that Americans believe they’re facing a variety of obstacles to saving, McClary said there are simple steps people can take to set aside more and improve their financial security.

Find motivation to save. Knowing that you need to save and being motivated to save are two different things. So if you need encouragement to save, consider the consequences of not saving, McClary said. “What would happen if you don’t fix the issue of an empty savings account?” he said. If you think about the problems and what will happen if you don’t do something now, that paints a pretty ugly scene. That can be motivating to do something quickly.”

Make saving a priority. You shouldn’t wait until the end of the month to see how much cash you have left over to put in savings. Instead, you should create a budget and include savings at the top of the list of essential expenses. To determine how much you can set aside, add up the expenses you must pay and determine what nonessential expenses you can cut to make more room in your budget to save. That doesn’t mean you have to cut out everything you enjoy, McClary said. Look for free and cheap alternatives. Also, look for ways to lower your monthly bills by comparing rates from other service providers or negotiating with your current providers.

Automate savings. To ensure that you save money, ask your human resources department at work to deposit part of each paycheck directly into a savings account. “That set-it-and-forget-it guarantees success for even the worst savers,” McClary said.

Find someone to hold you accountable. “Being held accountable to your goals is not something everyone can do for themselves,” McClary said. “The chances for success are improved when you bring positive support and encouragement from others around you.” Share your savings goals with a friend or family member, or enlist the help of a professional. The National Foundation for Credit Counseling has member agencies in all 50 states where you can sit down and work out a budget for free, McClary said. You can find a member agency in your area at NFCC.org.

Stop worrying about failing. A big reason people don’t bother to budget and set savings goals is because they’re afraid of failure, McClary said. But not trying guarantees failure. Instead of worrying about making mistakes, accept that it’s OK to stumble every now and then on your way to reaching your financial goals, he said. Just make a commitment to learning from those mistakes.

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