Tips for Increasing Your Monthly Savings by Hundreds of Dollars:

It’s amazing how minor changes to your finances can result in significant savings. Changing your spending habits and cutting costs wherever possible makes it much easier to save money each month. You may believe that your small purchases aren’t adding up, but it’s amazing how much money you end up spending on things like your daily latte in the long run.

For example, saving $3 per day for a year equals $1092! So, as you can see, learning how to save money each month on even minor purchases will quickly add to your bank account!

The proverb “A penny saved is a penny earned” is often attributed to Benjamin Franklin. In other words, it is preferable to save money rather than waste it.

While saving for the future may appear daunting, if you begin by putting aside a little more money each month, it may be easier than you think. You can make Benjamin Franklin proud by carefully reviewing your recurring monthly expenses, figuring out ways to cut those expenses, and sticking to a budget. This is how.

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Tips for Increasing Your Monthly Savings by Hundreds of Dollars

Financial difficulties are an unavoidable part of life. Finding ways to save money each month can help you get through difficult financial times. Fortunately, there are simple ways to reduce your monthly expenses, which can add hundreds of dollars to your budget.

This guide will give you some ideas for lowering your bills with minimal sacrifice.

Proven Methods for Saving Money Every Month
We’ve compiled 36 money-saving ideas to help you improve your finances, ranging from changing daily habits to lowering monthly bills.

Regardless of your situation, this list will assist you in locating some simple ways to save money.

1. Trim the Cord

Cutting the cable cord is one of the most effective ways to save money each month. Cable costs more than $200 per month for the average household.

There’s no reason to spend that much money when there are cable alternatives available. You can save at least $125 per month by using a streaming service. Streaming services also do not have contracts, so you can leave whenever you want.

2. Earn Cash Back on Grocery Purchases

Couponing is usually included on any list of money-saving suggestions. If you don’t want to waste time clipping coupons, you can save money at the grocery store by using your smartphone.

Ibotta is a mobile app that allows you to earn cash back on purchases. After you’ve finished shopping, scan your receipt so the app can identify any items with rebates. You can also pre-select items with rebates before you go shopping.

Signing up for the app earns new users $20. When your balance reaches $20, you can redeem it.

3. Examine Your Cell Phone Requirements

Switching to a no-contract phone plan, like switching to cable, allows you to save money every month. Analyzing your needs could result in monthly savings of up to $100 per line.

If you use Wi-Fi frequently, you can switch to a smaller carrier without sacrificing reliability.

Ting Wireless is a great option because it covers Sprint, T-Mobile, and Verizon. The average monthly bill is only $23. Frugal Rules readers are eligible for a $50 credit.

4. Make Saving Automatic

When it comes to saving, one of the most common issues is that we frequently forget to do so. One of the most effective ways to save more money each month is to automate it. This allows you to save money without having to think about it.

A money market account with CIT Bank is an excellent option. It requires a minimum opening balance of $100.

You can schedule savings to occur on a weekly or monthly basis. The CIT Bank Money Market Account offers the same FDIC protection as a savings account, is fee-free, and pays 0.45 percent interest on cash balances.

5. Search for Coupon Codes When Shopping Online

If you’re anything like me, you do the majority of your shopping online. Nothing, however, is more infuriating than spending time looking for coupon codes only to discover they don’t work.

Capital One Shopping is a fantastic resource for avoiding this issue. The free browser extension searches for discount codes or savings on items you buy on your behalf.

6. Begin a Side Business

If you want to save money quickly, a side hustle may be your best bet. There are numerous side jobs you can start to supplement your income.

Delivery driver jobs are among the best because they pay $20 or more per hour.

DoorDash is our favorite delivery app because it allows you to deliver meals from restaurants, groceries from the grocery store, and a variety of other options. You can work on your own schedule and receive weekly payments.

7. Earn Cashback on Your Purchases

With cashback rewards on qualifying purchases, the Oxygen financial platform can help you save money every month. They have named their four different loyalty levels after the elements Earth, Air, Water, and Fire in order to better serve your financial needs.

Oxygen is a mobile app that is available on both iOS and Android that has no monthly fees to help you save even more money. You’ll also get early direct deposit, money transfers, and other perks when you sign up.

8. Bargain for Lower Bills

When was the last time you asked for a lower price on a service or looked over subscriptions to see where you could save money? If it’s been a while, you could be throwing money away.

Taking the time to bargain may result in a one-time discount or monthly savings.

If you despise bargaining, Truebill is a free service that will do it for you. Trruebill keeps 33% of any savings they obtain on your behalf.

9. Reduced Debt Payments

Credit card debt (and other high-interest debt) makes it difficult to achieve financial goals. The interest alone can eat up a significant portion of your budget.

Debt refinancing or consolidation can help you reduce your interest payments and even pay it off faster. This can save you thousands of dollars over the course of your debt’s life.

Check out your SoFi rate to see how much you can save. You can get a loan for as little as $5,000 with interest rates as low as 5.99 percent.

10. meal plan

Food waste eats up a significant portion of a household’s budget. Every year, the average family wastes nearly $2,000 in food. That’s money that will be thrown away.

Meal planning allows you to avoid this waste and save up to $150 per month by purchasing only what you need. If you’re new to meal planning, $5 Meal Plan is a great place to start.

This app provides meal planning assistance as well as a shopping list.

The service offers a 14-day free trial period.

11. Refinance Student Loan Payments

Student loan debt, like high-interest debt, can limit financial mobility. You could save hundreds of dollars per month if you refinance your student loans to an income-driven repayment plan.

Before you pursue this option, make certain that you will not be jeopardizing any of the protections provided by your original loan. If not, do some research to see what kind of rate you might be able to get.

Check your SoFi rate to see how much money you could save each month.

To learn more, read our SoFi review.

12. Look for Lower-Cost Auto Insurance

Many insurers have reduced car insurance rates as a result of people not driving as much during the pandemic. Aside from that, reports show that 40% of drivers have not compared rates in at least three years.

If this describes you, you could be throwing away hundreds of dollars. Comparing rates is the most effective way to find cheaper auto insurance.

Gabi is a useful tool that allows you to compare up to 40 insurers at the same time. The average user saves $825 per year.

13. Think about Term Life Insurance.

It is critical to have life insurance to protect your loved ones. However, many people mistake whole life insurance for term life insurance.

Whole life insurance is significantly more expensive than term life insurance. The latter is sufficient for the vast majority of people.

Savings vary depending on your circumstances, but term life insurance is frequently five to fifteen times less expensive than whole life insurance. You can even compare prices online rather than speaking with a salesperson.

Sproutt is an excellent resource. It allows you to compare insurers in order to find the best fit for your needs and obtain a low-cost policy.

14. Participate in the 52-Week Challenge.

If you find it difficult to save money every month, it may be best to start small. This gives you the confidence to increase your future savings efforts.

This is where the 52-week challenge comes in handy. You begin by saving $1 in week one, then $2 in week two, and so on until you have saved $52 in week 52. By the end of the year, you will have saved $1,378.

If you don’t already have an emergency fund, you can use the money you save from this challenge to open a money market account at CIT Bank once you reach $100.

15. Forego the Gym Membership

Gym memberships are expensive, which may not be an issue during the pandemic. The average gym member wastes $40 per month because they do not use it.

Instead of paying for a costly gym membership, use free workout apps to exercise at home and save money.

If you want to lose weight, you can even make money by using a service like HealthyWage.

16. Keep your spare change in a safe place.

Most money-saving advice books advise you to save your spare change. While this is an easy way to save money, why not invest that money instead?

That is something you can do with Acorns. Once you reach a $5 balance, this micro-investing app rounds up all of your purchases and invests the money in a low-cost portfolio of your choice.

Consider it like investing your spare change to increase your net worth.

17. Mortgage Refinance

Refinancing your mortgage could save you hundreds of dollars per month. Mortgage rates are at an all-time low. If you haven’t looked at rates in a while, you could be in for a big surprise.

LendingTree is a useful website that allows you to compare up to five different lenders. Contact a local mortgage broker to see how much money you could save.

18. Keep Track of Your Spending

Tracking your spending is one of the most effective ways to save money each month. This enables you to determine where each dollar goes, allowing you to find ways to improve your finances.

While you can manually track your spending, automation makes the process easier. Tiller is a service that takes care of this for you. It connects to your bank account and stores all of your transactions in a Google spreadsheet for you to review.

The service is free for the first 30 days, then $6 per month.

19. Keep an eye on your electric bill

Depending on where you live and how much energy you use, you can save hundreds of dollars per year by keeping track of your usage. Keep in mind if your provider offers a level pay plan to avoid unexpected swings in your bills.

Purchasing a programmable thermostat is another way to save money on your energy bills. According to reports, you can save up to 30% on your energy bills this way.

20. Do Your Own Haircut

Because of the pandemic, getting a haircut became more of a luxury than ever before. Make it a habit to cut your own hair in order to save hundreds of dollars each year.

Wahl’s low-cost kit is an excellent tool for cutting your hair. When combined with a good pair of scissors, you can save a lot of money.

21. Reduce the number of youth sports.

For many families, organized sports come at a high cost. Exercise and teamwork are important, but they can be accomplished for less money.

According to a USA Today report, 60 percent of families spend $100 to $499 per child on youth sports. Another 20% spend $1,000 each month. If you’re having trouble saving money each month, this is a simple area to cut back on.

22. Become a member of a warehouse club

Those looking for ways to save money may find a warehouse club to be contradictory. Costco and Sam’s Club, on the other hand, frequently provide significant savings to members.

Aside from grocery savings, both stores provide discounts on everything from travel to home services to prescriptions and more. Learn which Costco or Sam’s Club is best for you by reading our Costco vs. Sam’s Club comparison.

23. Purchase Used

Waste has an impact on more than just food costs. It also has an impact on how much we spend on things like clothing. If you have a growing family, consignment stores offer savings of up to 50% off the original price of an item.

You can even sell clothes that you no longer need to cover expenses.

24. Eat Less At Restaurants

Going out to eat is a pleasurable pastime, but it is also expensive. While the average family spends $225 per month on dining out, it’s easy to go over that amount.

When it comes to how to save money, cutting back on eating out is a simple solution. Reducing the number of times you eat out by one meal could save you $50 per month for other expenses.

25. Reduce Your Car Payment

A car payment, like other debts, can eat up a significant portion of your income. The average monthly car payment is more than $500.

If you have several years left on your loan, consider refinancing to lower your interest rate and save money.

26. Look for Lower-Cost Internet Service Providers

It is essential to have internet access at home. However, it is also expensive. Rates can differ greatly depending on where you live.

Call your current provider and ask for a lower price. If that doesn’t work, try a competitor with a lower rate.

If you want to get internet without cable, read our guide to internet alternatives.

27. Quit Smoking

According to statistics, the average smoker spends nearly $2,300 per year on cigarettes. If you are a smoker, you could save approximately $190 per month if you quit smoking.

The recurring savings are only one component of the equation. You will also save a lot of money on medical bills if you improve your health.

28. Use a no-fee bank.

Banks enjoy charging fees, even to their most devoted customers. According to USA Today, the average person spends $10-15 per month on bank fees. If you pay ATM fees, this figure may be higher.

This may not appear to be a large sum of money, but reducing the amount of money you pay in fees is critical. Fee-free banks such as Chime and CIT Bank are both viable options for reducing this cost.

29. How to Get Free Amazon Gift Cards

Because Amazon’s entire business model is based on convenience, it’s easy to overspend. You must exercise caution so that this expenditure does not have an impact on your budget.

Gift cards are an excellent way to reduce your spending. These can be obtained through Pinecone Research. You can earn money by taking surveys and testing products on this paid survey site.

You will not amass wealth in this manner, but it is a simple way to monetize your spare time.

30. Bring Your Own Lunch to Work

Do you want to increase your monthly savings? Bringing your lunch to work is a simple way to accomplish this.

Instead of spending $20 or more on takeout every week, bring leftovers or a sandwich and pocket the savings.

31. Begin a Garden

Starting a DIY garden is a great option if you enjoy vegetables but want to save money at the grocery store.

Begin by establishing a few small garden beds in your backyard. You’ll be saving money in no time.

32. Make Your Own Bottled Water

The Water Project estimates that the average person spends $100 per year on bottled water. Although it may appear to be a necessary expense, there are ways to save money while still having access to clean water.

Investing in a water filter can eliminate the need to buy bottled water. You can even buy a Nalgene water bottle to take with you when you travel because the savings will be quickly recouped.

33. Keep Your Raise

Have you recently been fortunate enough to receive a pay raise at work? Instead of looking for ways to spend the money, look for ways to save it.

If you must spend it, put it toward debt repayment to reduce the amount of interest you pay.

34. Save Money on Gas

For most people, spending money on gas is unavoidable. You can frequently find cheap gas by using your phone to search for lower prices.

To find the best prices in your area, use an app like GasBuddy or FullTank. This can help you save up to 5% on your gas bills.

35. Locate Low-Cost Prescriptions

Medicine can be costly. There are, thankfully, ways to save money on prescription medications.

GoodRx is a free app that allows you to compare drug prices. According to their website, the app is accepted at over 70,000 pharmacies across the country and can frequently save you a significant amount of money on your medication needs.

36. Utilize the Library

Using the library is one of the best ways to save money. Your local library will have movies, music, and books depending on where you live.

Before you spend $20 or more on a book or movie, check with your local library first.

How to get 1 dollar from everyone?

Adding more to Your Savings

Saving for a specific purpose does not have to be difficult. It simply entails doing some research, strategizing, and staying on top of one’s personal finances.

The first step in increasing your savings is to examine your current expenses to see what can be reduced or eliminated entirely to make more room for savings. This entails developing a monthly personal budget and keeping track of current personal spending.

To track spending, a person could create an excel spreadsheet and list all expenditures by category over the course of a month, such as groceries, phone bills, car expenses, housing, medical, entertainment, and others, filling it in with every single dollar spent to see where the money is going.

Following the completion of the month, the next step is to review the expenditures list. Was there anything that caught you off guard? Visiting coffee shops more frequently than necessary? What about that gym membership? Did you use it? It’s time to get a little ruthless.

After you’ve determined what’s left, try implementing a general financial plan, such as the 50/30/20 rule. This means that, on average, 50% of after-tax income goes toward necessities such as food and rent, while 30% goes toward discretionary expenses such as movie or concert tickets. The remaining 20% is allocated to savings and retirement account objectives.

It’s now time to get creative in order to save even more for the future. This can be accomplished by simply depositing additional funds into a savings or retirement account directly from a paycheck. In this way, it’s as if the money never existed in the first place.

Those looking to save a few extra dollars each month can do so by eliminating unnecessary expenses such as recurring payments on apps they may no longer use. However, instead of putting that money in your pocket for fun, consider putting it in your savings account.

Still feeling the pinch and don’t have much room to save from your budget? Nearly 69 percent of Americans live paycheck to paycheck and may want to consider finding ways to earn extra money if there are no more budget cuts to make.

Working part-time through an app like Uber, Lyft, or Taskrabbit allows people to set their own hours and earn extra money based on the amount of time they can devote to the part-time work. Freelance work in photography, writing, or other creative arts may also be an option.

5 Steps to increase your monthly cash or emergency savings

1. Lower your monthly expenses

Reassessing your day-to-day expenses is likely to yield significant savings.

Jenkin, co-author of “The 21-Day Budget Cleanse,” advises people to take a detox approach to their household budgets.

Examine your 21 largest bills — if you have that many — and try to shop around or exchange them.

Consider your bundled internet, phone, and cable bill. Inquire with your provider about the possibility of a better package or rate. In addition, look into the other options available to you through other companies.

“Most people haven’t taken the time to figure out where they’re overspending and what the difference is,” Jenkin says.

2. Examine your credit card usage habits.

If you’re not careful, credit card balances can cost you more than 20% of your available credit.

Unless you own a business, you don’t need more than two credit cards, according to Jenkin.

As a result, Jenkin suggests beginning with “plastic surgery” — cutting up your cards until there are only two left.

Then, review any rewards you’ve accrued to see how you can convert them into extra cash.

This could include an Amazon gift card or points that can be used to reduce your credit card bill. Many people have unused benefits that they did not use during the coronavirus.

“I don’t think anyone is looking,” Jenkin said. “It’s money that was found.”

3. Sell anything you aren’t using.

Aside from family heirlooms and holiday decorations, Jenkin says it’s time to sell anything you haven’t used in a year.

If you haven’t worn a shirt in a year, for example, you can sell it on Poshmark. Electronics that are no longer in use can be sold on websites such as Decluttr or Facebook, according to Jenkin.

“There are a lot of apps and websites where you can basically sell your stuff,” Jenkin said.

If you’re not ready to part with an item forever, such as an extra car, you might want to consider renting it out on a website like Turo instead.

4. Start a side business

Selling your items isn’t the only way to make more money, according to Jenkin. You can also sell your skills.

Websites such as Fiverr allow you to list your services and earn extra money.

“If you have a side hustle, skill, or talent, try to earn that extra money to build up a cash reserve,” Jenkin advised.

5. Store your money in a secure location.

Even with interest rates still at record lows, a savings account at an online bank or a local community bank is the best way to ensure you’ll have access to your money when you need it, according to Jenkin.

If you lose your job or start a business, you’ll need quick access to your money.

“You can’t afford to put it in cryptocurrency or the stock market,” Jenkin explained. “Doing that for three or six months is risky.”

What is the average American’s bank account balance?

Let’s take a look at what Americans have saved for rainy days.

1. Only 30% of Americans have a financial plan that includes a savings component.


Approximately one-third of the US population has no long-term financial plans that include savings (retirement, emergencies, etc.). Savings may become more important as Americans’ income rises. According to American savings statistics, those who earn at least $75,000 per year are much more likely to have savings.

Only 69% of adult Americans have more than $1,000 in savings.

(Source: GOBankingRates)

More than two-thirds of Americans have less than $1,000 in their savings account. Worryingly, most people with less than $1,000 in savings have no savings at all. In 2019, approximately 45 percent of adult Americans were unable to save any money.

More than half of women have no savings at all.

(Source: GOBankingRates)

Women appear to have more difficulty saving than men. The situation appears alarming, with 5.56 percent of women having no savings and only 22.94 percent having an average amount in savings of less than $1,000. Across the board, men have more in their savings accounts.

The average savings in the United States is $17,135.

(Source: PR Newswire)

When all American households and their savings accounts are considered, the situation does not appear to be too dire. In November 2020, the average savings account balance was $17,135. This, however, is the national average. That means it is made up of people from all over the country. West Virginia has the lowest average at $6,936, while South Dakota has the highest at $24,497.

The average American household has $3,500 in savings.

(Source: The Ascent)

Instead of looking at the average amount on the savings account, we should look at the median savings to get a more realistic picture of American savings. The median is nearly five times less than the mean. Few people maintain separate emergency and savings accounts, and those who do typically have around $2,000 in them.

Memphis is the best city to live in if you want to save money.

(Source:  CreditDonkey)

Memphis is the city that stands out when median earnings and median expenditures are considered. It has a median income of $73,816 and a median cost of living of $49,566. This means that the difference should, in theory, be saved.

38% of Americans say they are unable to save money because their expenses are too high.


High living costs are the most frequently cited reason why Americans do not save and why the average amount saved is so low. 16 percent haven’t started, and another 16 percent believe their job isn’t up to par. Only 8% believe they no longer need to save.

More than half of all Americans have less than three months of emergency savings.

According to the Federal Reserve, 39% of Americans do not have enough money on hand to cover a $400 emergency.

Every adult should save enough money to cover at least three months of essential living expenses. Everyone should have at least six months’ worth. That means there is still work to be done for some people.

But what is the average balance in a savings account? What is the average amount of money saved by Americans? For their savings accounts, do they prefer physical or online banks?

Finances of 2,000 Americans are served.

Important discoveries
Seventy-one percent of Americans have a savings account.
The majority of Americans (22%) have $1,000 to $5,000 in savings.
A third of Americans have $1,000 or less in savings, while 56% have $5,000 or less.
The median amount saved is $3,500, with a mean of $26,619.
The average emergency fund is $39,900, with a median of $2,000 available.
Three out of every four people keep at least some of their savings in a traditional bank.
More than half of those who have a savings account have more than one.
Approximately half of those polled said they have a separate account for emergencies.
The median COVID withdrawal is $1,000, while the mean is $3,139.
Three out of every four respondents have their savings deposits automated.

An explanation of averages, medians, and means.

You’ll notice that we use both the median and the mean to describe several statistics in this piece, though we prefer the median as a representation of what’s average. This is why:

Means are what most people consider to be an average; in this case, the total amount of savings in the United States divided by the number of people who have savings accounts.

But there’s a catch: extremely high values skew the mean significantly. For example, if five people have savings of $10, $100, $1,000, $10,000, and $100,000, the mean is more than $22,000. Is that an accurate depiction of the average person’s savings? No, not at all.

The median, on the other hand, is the value in the middle. So, in the preceding example, the median would be $1,000. That is a more accurate representation of what the majority of the people on the list have in savings. And as more people are polled, the median becomes even more robust.

We do, however, provide both the median and the mean so that you can compare the two.

The average savings account balance in the United States is $3,500.

Seventy-seven percent of Americans have a savings account. But, how much money do they have in their bank accounts?

When we asked our respondents how much money they had saved, the median figure was $3,500. The average savings balance, on the other hand, is $26,619.43.

Why is there such a large disparity?

It’s the small number of people with more than $100,000 in the bank who drive that figure so high.

When the median is much lower than the mean, it indicates that a greater number of people have less than the mean. Simply put, $3,500 is a better representation of the average savings account balance.

The majority of Americans have $1,000 to $5,000 in savings.

In addition to asking about the amount of money in their savings accounts, we asked people to select a range in which their savings fell.

The average amount in an emergency fund is $2,000

We inquired about people’s emergency funds as well as their general savings accounts. Not everyone, however, keeps a separate account for emergencies; we’ll go over that in more detail later.

However, among those who do keep a separate account, the median emergency fund balance is $2,000. Among those same people, the average emergency fund balance is $39,900.45.

(We’ll get to those people in a minute.)

That may seem like a lot, but keep in mind that three months’ worth of living expenses is the bare minimum for an emergency fund.

The average amount in an emergency fund is $2,000

We inquired about people’s emergency funds as well as their general savings accounts. Not everyone, however, keeps a separate account for emergencies; we’ll go over that in more detail later.

However, among those who do keep a separate account, the median emergency fund balance is $2,000. Among those same people, the average emergency fund balance is $39,900.45.

(We’ll get to those people in a minute.)

That may seem like a lot, but keep in mind that three months’ worth of living expenses is the bare minimum for an emergency fund.

Many people require six or more months’ worth of living expenses in the bank to feel secure, so it’s likely that some people will supplement their emergency savings for added peace of mind.

For their savings, 75% of people prefer physical banks.

74.83 percent of Americans keep their savings in a physical bank, compared to 48.24 percent who keep their savings in an online-only bank. Those figures include people who have accounts at both places.

Which is the better option: online or in-person? It all depends.

Because they do not have physical storefronts, online banks frequently have lower interest rates. However, physical banks may offer better customer service. They also provide services such as safe deposit boxes.

And, unlike an ATM at a physical bank, your computer screen cannot dispense cash. Unfortunately, the majority of the best online savings accounts do not include ATM cards.

You’ll notice that people had the option of selecting more than one option. This is due to the fact that the majority of people who have a savings account (55 percent) have more than one. And they don’t always bank together.

51% of savers distinguish between general and emergency savings.

Some people have a single savings account where they save for both general savings and emergencies. Others keep separate accounts.

Respondents in our survey were roughly evenly divided between the two camps.

There is no such thing as a correct or incorrect approach.

You should have enough money in the bank to cover at least three months’ worth of living expenses. Consolidating your general savings and emergency fund makes sense if you have extra cash and it’s easier for you to manage a single bank account.

However, it may be beneficial to keep those accounts separate so that you do not accidentally withdraw from your emergency fund.

Assume you require a $9,000 emergency fund to cover three months of living expenses. Assume you’re saving for a vacation and continue to add to your savings after your emergency fund is depleted.

If your balance is $10,200 but your trip costs $1,400, you might unintentionally dip into your emergency fund.

Keeping those accounts separate has an advantage.

Three out of every four Americans have their savings automated.

The most difficult aspect of saving money is resisting the urge to spend it. That is why it is frequently advantageous to set up an automatic recurring transfer from a checking account to a savings account.

According to our survey, 76.45 percent of respondents with a savings account have an automatic transfer from checking to savings or an automatic deposit from their paychecks to savings.

This increases the chances of meeting savings targets.

Thousands of Americans have withdrawn as a result of COVID-19.

Many people experienced income loss during the COVID-19 crisis and had to dip into their savings accounts as a result.

The median amount withdrawn from savings in our survey was $1,000, but the mean withdrawal was $3,138.79.

Again, the combination of median and average indicates that more people withdrew less than $3,138.79 than those who withdrew more.

Given that the average emergency fund is $2,000, this means that many people had to use up half of their emergency savings to cover expenses during the pandemic.

Statistics – Fascinating Facts About American Savings

But, before we get into the details, let’s take a step back and look at the big picture.

The personal savings of Americans total more than $3.9 trillion.

(Source: FRED)

By November 2020, Americans will have saved more than $1.31 trillion more than they would have if the lockdown had not occurred. According to American savings account statistics, even before the pandemic, the national savings total was set to exceed the previous year’s total by $900 billion.

By the way, don’t forget to check out our fantastic list of money-saving ideas.

In 2018, 56 percent of American parents were saving for their children’s college education.

(Source: Statista)

According to data on American savings, the majority of those with children under the age of 18 have begun saving for their child’s college education. There has been a noticeable decrease in this number from 2009 to 2018 — in 2009, 62 percent of parents were saving for their children’s higher education.

38.1 percent of American families have a liquid savings account.

(Source: Statista)

According to a 2019 survey, 38.1 percent of American families save money because of liquidity. According to American savings statistics, the second most common reason for families in the United States to save is for retirement, which accounts for 28.4 percent of all savings. Planned purchases come in third place with 11.2 percent.

In January 2021, the personal savings rate in the United States was 20.5 percent.

(Source: FRED)

Since 2005, the percentage of disposable personal income that Americans save each month has been increasing. While there were some hiccups along the way, the progress was fairly predictable. The pandemic altered people’s spending habits, resulting in a massive increase in April 2020. The current rate of 20.5 percent is higher than the pre-2020 record of 17 percent in 1975, according to American savings statistics and history.

Nearly 75% of Americans keep their savings in physical banks.

(Source:  The Ascent)

It appears that brick-and-mortar banks continue to outperform their online counterparts in the eyes of the American public. Only 51.76 percent of people use physical banks, while 25.18 percent only use online banks. The other 23.06 percent use both.

Almost half of all American households have no retirement savings.

So far, we’ve concentrated on short-term savings, or money to be used in an emergency. But what about retirement savings in the long run?

According to the Economic Policy Institute, only 54% of families headed by workers aged 32 to 61 have any kind of retirement plan, implying that nearly half of families have no retirement savings at all.

Meanwhile, the median retirement savings across all generations is estimated to be $50,000.

This figure increases with age: $23,000 for millennials, $64,000 for Gen Xers, and $144,000 for baby boomers, according to the Transamerica Center for Retirement Studies.

Since older workers have had more time to save and invest in a retirement plan, it stands to reason that their median IRA or 401(k) balance is higher than that of younger generations.

More Statistics

Keep in mind that the figures above represent average savings account balances based on our survey.

We recognize that our sample set provides only a sliver of the picture of how people save, so we’ve compiled some additional data:

According to the Federal Reserve, Americans have a total savings of $11.7463 trillion. When we divide that figure by the 209,128,094 U.S. adults and assume that 70.70 percent of them have a savings account, we get an average savings account balance of $39,710.

According to the Transamerica Center for Retirement Studies, the average American has $5,000 in emergency savings. However, median emergency savings rise with age: $3,000 for millennials, $5,000 for Generation Xers, and $15,000 for baby boomers.

The personal savings rate was 17.8 percent in July 2020, which means that Americans were saving that percentage of their income, but this does not differentiate between general savings and other types of savings, such as retirement savings.

40% of households have at least three months’ worth of living expenses saved; 28% have at least six months’ worth of living expenses saved.

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