Americans Are Failing at Saving Money

Americans are in the midst of a savings crisis. A massive 63% of Americans don’t have enough savings to withstand a $500 emergency. Even more concerning is that there is a growing percentage of Americans with no savings at all.

Since the 1970s, our personal savings rate has fallen from 12% to just 3% today. At least one-third of Americans live paycheck to paycheck.

When it comes to your finances, no amount of positive thinking or good attitude will help you grow your bank account unless you back them up with some action. Too many people are plagued with bad financial habits. Whether they’re overspending, not being realistic, or not setting effective goals with sound financial plans to achieve them, it's much easier to pretend your problems don’t exist and go about your daily life, than to make an uncomfortable change.

Here are some major reasons why someone might fail at saving their money:

1. Wasteful Spending

USA Today listed 20 of the top ways recently American waste money. chief among them were:

• wasted energy bills
• daily coffee purchases
• premium cable packages
• traffic tickets
• lottery ticket purchases
• unused gym memberships
• tobacco, alcohol and gambling
• ATM fees
• expensive (unneeded) warranties
• credit card interest.

Wasteful spending can come in many different forms -for some it's the weekly stops at the local mall while others might be addictedto thelatest pricey electronics and gadgets.For a large percentage of people it's food spending that's to blame for their money troubles. If you're heading out to a restaurant for lunch each day you could literally be eating your savings away.

2. Lack of Budgeting

Everyone can benefit from keeping a monthly budget, but too many people don’t use this tried and tested method of monitoring spending habits.

Maintaining a guide to your monthly spending helps people to make better spending decisions. And if you're not tracking your spending, chances are you're wasting all sorts of cash each month.

3. Priorities

Too many people don't put their finances first, and simply let the chips fall where they may. Sadly, letting your finances "happen naturally" is the worst way to get ahead, mostly because life happens, bills happen, and it's easy to get off track. The old saying, “Hope for the best, but plan for the worst,” applies here.

When you don't make your finances a priority, it's inevitable that your situation won't change much. If you really want to get ahead, you have to put your money first, and take steps to save, pay down debt, and invest wisely.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC