If there is a constant concern among everyone, it is the small amount of money you can save month to month compared to what you find yourself earning in the U.S. What is your Average savings account balance? Well, we have an article dedicated to that.
Unlike other generations, the latest generations of Americans are able to save much less money. The cost of living has risen dramatically, and the ability to save has been greatly reduced.
Time to start thinking about average saving account balance
Anyone who has a stable job or is at least 25 years old or older, should already start thinking about an average savings account balance to protect your money in the future.
This is mainly because there are companies in the United States, that do not meet the expectations of the Retirement Funds and then you are left with no income and no savings.
Although the United States continues to sell the idea of being a country “where dreams are possible”, in recent years this theory has been somewhat dismantled. The average savings balance of Americans under the age of 35 is no more than $3,240.
If we talk about people between 55 and 64 years of age, the data is not very encouraging either: an average of 6,400 dollars. This shows us that the capacity to save is almost nil at this time in the country.
Saving money should be a necessity that everyone should understand. Of course, as you get older, you wonder a lot more about the financial picture of your life.
It is recommended that you have at least the equivalent of 3 to 12 months of your salary in savings. How? For example, if you have a monthly income of about $3,000 dollars, the minimum you should allow yourself to have saved is about $9,000.
Savings of Americans by age
We have already given you an overview of the amount of money that younger people tend to have and also those entering retirement age.
We’ve taken on the task of getting some interesting data. The Federal Reserve Board’s Survey of Consumer Finances has more than interesting data to analyze:
The average savings of those under 35 years of age behaves as follows:
- Under 35. They barely have between $3,240 dollars.
- People between 35-44 years old. Average of about $4,710.
- The Average between 45-54 years old. Average of about $5,620.
- Savings in people between 55-54 years old. An average of $6,400.
These data have a quite logical explanation and it is that, despite the fact that you are older, the average age is almost double between someone who is in his productive age and someone who is already “on his way out”. Apart from barely “doubles” the saving capacity that the former may have.
For a South American country, this average savings may be very high, but it is not in the United States. In fact, BankRate claims that by 2022, more than 50% of Americans would be unable to cover an unexpected $1,000 in debt from their savings fund.
This sends out a very clear warning: Americans, more than across the board, do not have the capacity to save the money they are producing in each of their jobs.
Who achieves an average saving account balance?
This is a very relevant question nowadays, because we tell you that the advantage of those who can save over those who cannot is a percentage higher than 60% of the money saved.
Studies show that, at least in the United States, those who are able to save do so in large numbers and have an average savings account balance. Basically, we can say that there is an imbalance between those who obviously earn an average salary, while there are others who earn more than $100,000 a year.
Amount that should be saved by age
According to MarketWatch Picks, there are different mechanisms that will allow us to save from month to month and by year.
Savings needs are very changeable depending on the kind of life you are willing to lead.
BankRate, through Ted Rossman in his study, asserts that: “Someone in their 20s with no spouse or children, who rents and rides public transportation, will have the savings needs of someone in their 30s or 40s”.
This is a great truth and it happens due to the fact that surely, those who have children, have more expenses in their families. However, not everything is rosy for young people, since their jobs are usually the least remunerated of all the productive sector of the country.
In order not to be too demanding with respect to people’s savings capacity, the savings ideal can be summed up in one sentence: you should have 3 to 6 months of expenses saved for emergency savings.
Of course, those people who divide the expenses in a household, may have a greater capacity to save together with a third person. Similarly, we have to take into account those who earn above average as professionals, if you are one of them, your saving capacity should be at least between 8 and 12 months later.
Savings plans depending on current needs
The lifelong dream of much of the American conglomerate revolves around buying a home. Of course, if you’re looking to save to buy a home in a couple of years, your ability to save must be much more consistent than if you’re looking for money for retirement.
Also learn to separate savings into two broad categories: savings with clear objectives and emergency savings.
It will always be positive to know how to cope with a situation if you have a savings fund. As happened with the emergence of Covid-19, many people were left unemployed for at least 3 months. So a Average savings account balance rate would have allowed them to have peace of mind, avoiding acquiring debts that later must be paid with high interest rates.
Ease of credit ends up working against savings
If there is a very common trend in the United States, it is the fact of being able to pay for everything in installments and on credit. It may seem great to pay for a TV or a PC in two years. What can go wrong?
All this changes drastically when you realize that you have 20 credit payments, but in addition to this, you are not left with a fund attractive enough to generate savings in your account.
Tips for learning to save depending on your age
If what has brought you here is the fact of not having an average savings account balance that is attractive or functional enough for you, you are in the right place!
We will try to give you advice, or at least a perspective, on what you should evaluate to generate savings.
Pay close attention, as you will surely find this appealing.
Saving expectations by age
Savings expectations at age 20. As we have already said, financial priorities are very different at this age. Maybe you are just starting your career, someone is giving you money, or you are even using your current job to pay for your studies.
The goal in these years should be to have a saving capacity of at least 10 or 15%. Keep in mind that if you are working and paying for your studies, take advantage of the time! Since it is an investment.
Expected savings at age 30. This is when you should find yourself mostly established in your career. To facilitate saving, you will probably have to modify your lifestyle.
You should no longer decide to have the latest shoes, phone or TV of the moment. It is enough to have one of them new and others a little older that you can still take advantage of.
It is important that you learn to save the money you spend every day eating on the street, plus the money that goes down the drain on 20 streaming accounts. A clear and basic example:
If each streaming account costs $30 per month and you sign up for at least 5 services, that’s a total of $150. Which at the end of the month you don’t end up enjoying and additionally takes at least $1,800 per year out of your paycheck.
Sometimes, the best decision you can make is to turn to a financial advisor. The more careful you are with your money, the better you will do in the following stages of your life.
Second part of the savings plan
Savings expectations at 40. It is at this age that you should try to diversify your career or investment objectives. Generally, people should seek to earn income in addition to their conventional employment.
If you’ve already managed to get out of a home mortgage or college for one of your children, it’s best to start putting your money away. Look for ways to grow your money with small investments that work for the long term.
Savings plan at 50. When you reach 50 with a job, there is a sea of doubts in your head. If this is your case, try to make sure you’re on the right track. Use the calculator for everything you’re going to spend.
Also, take a good look at the retirement fund you have and what you should have extra to be able to live as you wish or as you currently are.
Eventually, it will be a little easier for you to save money simply because your children should already be out of the house.
This makes it much easier to cut some expenses. You are unlikely to want to spend $60,000 on the car of the moment, it is enough to have one that is functional and economical.
Savings plan for 60 and over. As you reach this age rangeo of Average savings account balance in your life, be sure to make the expenditures that are truly essential to you.
Remember, beyond being in good health, generally in this stage of life, expenses and visits to doctors tend to be higher.
Basically, what you should understand is that the average savings account balance is a measure that we all should continuously review and analyze. In order not to have major problems in case of emergency or unemployment for multiple reasons.