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Personal savings in United States - statistics & facts
In personal finance, saving is the preservation of money for future use. There are various reasons why people save. Short-term goals include saving money for holidays, purchases, or renovating a house. In the long term, the most crucial reasons for putting money aside in the United States are related to the costs of the education of one's children or ensuring financial stability in retirement. However, the high inflation rates in the United States since 2021 have made it more difficult to save money.
Saving during times of crisis
Saving rates in households change over time and are dependent on the economic environment. During financial booms, people tend to spend more and save less money. However, when the economy slows down, families concentrate on preserving their capital and preparing for the hard times. The personal savings to income rate in the U.S. amounted to around 2.5 percent in 2007, and it more than doubled in the years following the financial crisis in 2008. Similarly, during the start of the coronavirus (COVID-19) pandemic in 2020, the savings of U.S. citizens peaked.Saving or investing?
Attitudes towards saving and investing are closely related. Once a certain amount of money is put aside, questions arise about how to increase it. Hiding the money under a mattress is not a solution as inflation will eat up those savings. There are many financial instruments available on the market which can meet the needs of both prudent and risk-loving investors. For instance, money can be placed in savings deposits to earn a modest interest. The value of savings deposits and other checkable deposits in the United States was worth approximately 11 trillion U.S. dollars in December 2023. For longer-term savings, money market instruments or bonds are more appropriate as they also are low-risk investment options but offer a higher return rate than savings deposits. Savings can also be entrusted to professional fund management companies. The share of American households owning mutual funds amounted to 52 percent in 2022.
