Three-in-four Americans report saving as much as or more than they did last year, 40% say it’s because they have a better understanding of how to set up a budget
The COVID-19 pandemic is reshaping Americans’ perceptions of their pre-pandemic financial habits, according to a new survey from Discover. Sixty percent of Americans say the pandemic made them realize just how little savings they have, and 71% say it made them want to consider saving more than they had previously.
“Though the past year has been difficult financially for many Americans, it is encouraging to see people prioritizing putting away money where they can and taking small steps to enhance financial futures through continued savings, even if the total amount seems low”
Most Americans (75%) report that they are saving either the same amount or more in 2021 than they did in 2020. Almost half of those who are saving (47%) are putting away less than $200 a month. Gen Z savers are saving the least, with 55% reporting savings under $200 a month, followed by 49% of Gen X and 47% of millennials.
“Though the past year has been difficult financially for many Americans, it is encouraging to see people prioritizing putting away money where they can and taking small steps to enhance financial futures through continued savings, even if the total amount seems low,” said Ram Subramanian, vice president of Deposits at Discover. “Especially in difficult economic times, this can be a significant start toward an emergency fund, down payment or nest egg for retirement. If consumers understand their financial situation and know how to best leverage savings vehicles, it can go a long way in fully maximizing what they’re putting away.”
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Americans say financial literacy is helping them save more, while non-savers don’t believe they make enough
For those who are saving more in 2021, 40% say it’s because they have a better understanding of how to set up a budget, and 34% say they are spending less as a result of pandemic limitations. Additionally, 22% are shoring up their savings in response to financial instability amid the pandemic.
Savings habits vary by generation, yet over half of Gen Z and millennials credit an increased awareness of how to budget as the reason they’re saving more than they did a year ago (54% and 51% respectively). These generations are also the most likely to have sought resources to better understand how to budget and save amid the pandemic. Sixty-eight percent of Gen Z and 71% of millennials reported doing so.
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Just 9% of Americans say they are not saving at all. When asked the reasons why they aren’t saving, 56% said it’s because they don’t make enough money to save, while 13% said they aren’t sure why they don’t currently save.
Discover’s survey found that increased wages would be the most compelling reason to put aside more money within the next six months. Further, 21% of Americans not saving said a one-time increase in income, like a stimulus check, would increase their likelihood of saving.
