UNITED STATES (VOP TODAY NEWS) — Those who still postpone something, send less than 10% of their income to it.
Approximately one fifth of Americans do not have savings for unforeseen expenses. According to the Bankrate survey, about 21% of working Americans do not save money at all. And among those who still do this, the majority sends less than 10% of their income to the reserve.
Over the past few decades, household savings in the United States have shown a downward trend. According to the Bureau of Labor Statistics, in December, Americans saved 7.6% of disposable income. Until the 1980s. this indicator was mainly double digit.
According to Brian Rose, UBS Wealth Management senior economist Brian Rose, the rise in inequality was one of the possible reasons why personal savings, by historical standards, remain so low compared with other countries.
“Low-income households that mostly live from paycheck to paycheck prevail,” the expert notes. “Thus, they have no freedom of action in their finances.”
A recent Fed survey showed that in recent years, more and more households are still trying to prepare for unexpected expenses. However, four out of ten Americans say that it will be difficult for them to cover expenses in the amount of $ 400, such as repairing a car or repairing a broken device.
This does not mean that Americans are not trying to save. The situation was commented on by Jonathan Morduch, an economist at New York University and co-author of the book “Financial Diaries”, which describes in detail the study of the costs of 235 households per year. “We see that households often save, and then spend their savings,” the economist said. “Thus, when a fifth of Americans declare that they have no savings, this means that they have no long-term savings.”
One of the reasons is that Americans are struggling to repay loans, with about 13% of Bankrate survey participants refer to debts as the reason they cannot save. Americans extinguish a lot of loans: from car loans to educational loans. In total, the volume of consumer loans in the country is about $ 4 trillion.
In the coming months, the lack of savings may become more urgent for Americans. Many economists expect growth to slow over the next two years, and some even expect the US to enter a recession by 2020.
This article is written and prepared by our foreign editors writing for VOP from different countries around the world – edited and published by VOP staff in our newsroom.
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