Savings

America Saves Week – The Dwindling Savings Rate

Well, it is American Saves Week and here at Debt Roundup we are trying to show how you can save as much as you can even though the interest rates you earn are dismal at best.  As the years have progressed, savers have really had to work harder to keep money in their pockets and in their bank accounts.  This global economy is not a saver’s economy.  You might not have any problems shelling out money, but if you want to sock it away for a rainy day, you are no longer rewarded.  This mentality has to change.  We need to bring the saver back, especially in the US and Canada.

Related: 13 Ways to Save Money

The infographic below really makes me upset.  It just shows how far we have fallen from being a good saving society to an overspending, have it now society.  The ones that are currently rewarded are the ones that want to make purchases, especially homes and purchasing cars.  Banks are providing savers paltry interest rates and then lending that money to another person for a much bigger rate.  Banks make the money and savers get the short end of the stick.  This trend just frustrates me.  I have been working hard on saving money in order to put myself in a better financial position and now I have to resort to rate chasing.  Now, I have a couple savings accounts at a Credit Union and Ally Bank.

I hope you enjoy the infographic as I know that I have, but not in an uplifting manner.  We need to work on this trend and start saving more money.  Only saving an average of 2.7% of our 2013 income, we are only hurting ourselves.

The Incredible Shrinking Savings Rate

Infographic provided by Visual.ly

How do you feel about this infographic?  Do you feel as upset about this ugly trend as I do?

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Grayson Bell

Grayson Bell

I'm a business owner, blogger, father, and husband. I used credit cards too much and found myself in over $75,000 in debt ($50,000 in just credit cards). I paid it off, started this blog, and my financial life has changed. I now talk about fighting debt and growing wealth here. I run a WordPress maintenance and support company, along with another blog. It is Empowered Shopper, which helps people get information about products they want to buy. You can also check out Eyes on the Dollar, which is a great blog that I co-own.

30 Comments

  1. February 27, 2013 at 8:14 am — Reply

    Why would you put money into savings with such low interest rates? You would be better off risking it on the stock market in my opinion.

    • February 27, 2013 at 9:47 am — Reply

      It can be more liquid in a savings account. It is really just to get the correct mentality about saving. The stock market is not a savings vehicle, it is all about investments. You won’t lose your money in savings, but you sure can in the stock market.

      • Brian
        February 27, 2013 at 3:01 pm — Reply

        But you are losing money to inflation with those savings rates.

        You point that we don’t save enough is spot on the money. I assume the savings rate only takes into account the amount you put into a savings account and not the percentage you put into a 401(K).

        • February 27, 2013 at 6:27 pm — Reply

          Yes, you are losing money to inflation, but not having savings causes you to lose money on credit card interest. This is just savings and not investments.

  2. February 27, 2013 at 8:31 am — Reply

    Way to go France! I wonder what they are doing differently there? The obesity rate in France is much lower than in North America as well.

    The low savings rates are not directly related to the low interest rates but are because of the wants in our society that have become needs. How can you live in a house without an ensuite bath or granite counters? Why do people think there children need iphones? If they want the children to be able to call in an emergency there are much cheaper options but only an iphone will do.

    I am not saving much because I have debt to deal with but as soon as I am done with it I will be saving a high per centage of my income regardless of the interest rate.

    • February 27, 2013 at 9:48 am — Reply

      Wait…..We don’t need granite countertops and my son won’t need an iphone when he turns 6? I guess I can scratch those off my list.

      You are correct KK. The savings rate is rarely ever tied to the interest rate, but now savers are getting more of the shaft.

  3. February 27, 2013 at 8:38 am — Reply

    I would totally agree that Americans need to consciously save more money. However, I also wonder if this is a product of how our system works, funneling most of the money upward while squeezing the average worker. Of course, we can only control our own situation. I would guess that it represents a combination of both.

    That is a wonderful infographic, BTW. I love it!

    • February 27, 2013 at 9:49 am — Reply

      True, our system is not that great for savers, but you have to be responsible for your own money and not worry about what others are doing.

  4. February 27, 2013 at 8:42 am — Reply

    Good infographic Grayson, though I can entirely relate to the frustration. I understand banks need to make money, but the spread they have is just absolutely ridiculous at many if not most of them. The thing that gets me the most is the turnaround since 2010. It’s just further proof that we, as a whole, do not learn from history…or our mistakes.

    • February 27, 2013 at 9:49 am — Reply

      So true John. We get scared about a recession, start saving, then turn around and spend it all when it gets better.

  5. February 27, 2013 at 2:55 pm — Reply

    It’s SO frustrating to see that people are SO far behind, but are largely oblivious to the fact that they need to speed up. Knowing you’re behind is one thing. Not knowing should be criminal!

    • February 27, 2013 at 6:28 pm — Reply

      Haha, it would be interesting if there were criminal charges for not saving.

  6. February 27, 2013 at 5:02 pm — Reply

    I really think that the low rate of returns have a lot to do with it. You are far better off paying off High interest rate debt than putting it in a MM account paying .25%. I have almost zero dollars in savings,at least in the traditional savings account. Money that I have set aside for “savings” are typically put in a street account (in my case TDAmeritrade) and either reside in their MM equivalent or a low risk, interest bearing fund. I’m not sure that when the statisticians count all the savings in the U.S. that money saved like that is included in the stats. Any idea ?

    • February 27, 2013 at 6:30 pm — Reply

      That is true, but there should be a happy medium. We should pay down debt and save. I don’t think those accounts were included in the stats.

  7. February 27, 2013 at 5:46 pm — Reply

    Another great infographic, Grayson. It does make me sad and frustrated. The lack of awareness about money in Americans scares me. My hope is with the growing number of PF bloggers some of these knowledge will permeate into the mainstream collective and start to shift behaviors. Otherwise a whole lot of people are going to be in for a very rude awakening.

    • February 27, 2013 at 6:31 pm — Reply

      Yep, retirement is going to be a thing of the past if the current trend continues.

  8. February 27, 2013 at 8:01 pm — Reply

    They’re talking about cutting rates further here in the UK mate, not good!

    • February 27, 2013 at 11:01 pm — Reply

      So, it will be that you are paying them to hold your money and you will earn nothing. It will be a negative interest rate here soon.

  9. Justin@TheFrugalPath
    February 27, 2013 at 10:48 pm — Reply

    I agree with you about savings accounts. If I had a fully funded emergency fund I’d be funding my retirement right now rather than trying to pay off credit card debt.
    Investments and savings are not the same thing. They should be two different categories. You don’t need to make money with all of your money, sometimes you just need it to protect you. Sorry for the rant.

    • February 27, 2013 at 11:03 pm — Reply

      I agree with you. You should have a savings account and you should have investments. You should keep them separate and not consider them anywhere near the same. It is the same as people thinking as credit cards as their emergency fund.

  10. February 27, 2013 at 11:19 pm — Reply

    Honestly, savers are losers in our monetary system. The Federal Reserve and their destructive policies hurt savers more than any other group. What’s the incentive to save if your money will lost most of it’s value from inflation?

    • February 28, 2013 at 10:31 am — Reply

      That is true, but we have to start getting people to actually start saving money. Saving is the first step, investing that saved money would be the next. Start small, end big!

  11. February 28, 2013 at 1:13 am — Reply

    I think the interesting question is: where is the extra money going? Is it all lifestyle inflation run amok, or is it something else, like increasing housing prices or fuel costs?

    • February 28, 2013 at 10:32 am — Reply

      I think it might be both Alex. Prices are increasing around us and lifestyle inflation is killing the average person.

  12. February 28, 2013 at 11:47 pm — Reply

    It’s always sad to see personal savings rates go down. It does make you wonder if we are spending more or just making less or the same while prices continue to rise and health care costs keep going up. I think savings goes first instead of insurance. Of course, there are lots of iPads, TV’s, and new cars that get sold as well.

  13. March 1, 2013 at 10:12 am — Reply

    Our savings rate has certainly gone down since we have been led to believe we are a rich nation and therefore have to spend our way to prosperity. All of us smart people who read these blogs are in the minority, we just need to do our part and teach the majority!

  14. March 2, 2013 at 4:24 pm — Reply

    What a depressing infographic, it pretty much embodies why we have this recession right now. The killer part is those are averages so you know there are people wayyy worse than 2.7% (less than inflation).

    I do think that as a country we’ve turned a corner on this stuff. I’ve seen a lot of graphs that show credit card debt as an overall percentage of GDP is dropping at a pretty steady clip along with people steadily increasing the amount they save.

    What I’m really afraid about is the student loan debt that’s building up. It’s into the stratosphere AND it’s seriously holding back our nations future – our children.

  15. March 3, 2013 at 8:50 am — Reply

    Wow, eye-opening infographic! I think this is about our spending habits more so than our paltry savings rates. You’re SO right about the banks rewarding spenders: we are constantly getting letters from our credit union about how wonderful we are and how they’ll give us a new car loan for only 1.99%, etc. The system encourages people to stay in debt. All around me I see what Jane talked about: Iphones and granite countertops, etc. Those things are not bad in general, but for the average American family who’s got several thousand dollars in debt and no savings, i-phones and granite countertops should probably go on the back burner in leiu of a savings and retirement plan. But who knows if that will actually happen. Our 20-year savings history tells me it won’t. 🙁 .

  16. April 17, 2013 at 12:22 am — Reply

    The personal saving rate is the federal government’s estimate of what percent of their incomes U.S. households are saving. But market watchers and economists are mixed on what can be learned from swings in the saving rate. You can check out this video http://www.youtube.com/watch?v=f1EzXOew8Rc

    • April 17, 2013 at 10:31 am — Reply

      Thanks for the video Gregory.

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