See how your savings habits and priorities stack up against others.
Building healthy savings habits is never easy. A Starbucks here and some takeout there might have that much of an impact. However, impulse spending is something many struggle with. Once that paycheck comes in, it’s up to you to do your due diligence and strictly determine what goes where. According to Motley Fool, the median savings balance is $3,500. While that number may seem appropriate to some, a more worrying statistic is that GoBankingRates also reports that 57.4% of Americans have less than $1,000 in their savings.
Credit.com has commissioned a survey of its most avid readers to find out just how they’re saving money every paycheck. Here, we will discuss our findings and what they can mean for many of the hardest working Americans™ we serve. And, perhaps it can serve as a great starting point if you’re looking for the top factors you should prioritize.
Bills Remain a Top Priority
Unsurprisingly, the biggest priority for earners is to pay down bills. And lowest on the list is clothing. This could signify that many are taking their spending seriously, especially amidst the COVID-19 pandemic. And among those that answered ‘other,’ the most popular answer was investments. So, many are thinking about the long-term benefits of smart saving.
Paying bills off early has many great benefits, including building your credit and cutting down accumulating interest rates. The second-most popular answer is crucial, as well. You should take care of yourself and your loved ones with equal or greater measure.
What about Savings?
When it comes to saving money, many might consider some of the most popular budgeting methods, and save a certain set percentage each time. While one percentage might not work for some, it’s important to determine which one fits best with your overall goals. Among our respondents, the most popular answer was 5% or more, while the second-most was 25% or more.
People have different reasons to save money, and how much they save every month is up to the individual. Before starting your savings, or even if you’ve already started, take a good look at your financial situation to find which percentage works best for you.
Most Are Thinking about Retirement
While some may not be thinking about the future that far in advance, the earlier you start saving for retirement, the better. The most common answers to this question were either retirement or an emergency fund, which has become more common due to the pandemic.
It’s often said that you need about a 20% down payment for a house. And while the housing market may have a lot of demand right now, even if it shows signs of slowing, saving enough to get a house will greatly increase your chances of securing one. 38.7% of participants put this on top of their list.
Confidence in Saving Habits Less Than Desirable
Saving well doesn’t necessarily mean confidence in your abilities to keep it going longer. While many respondents agreed that they’re confident in their saving habits, the same percentage (34.4%) fell on the opposite side of the spectrum.
Interestingly enough, 15% of respondents said that they’re working on building up their saving and budgeting skills, right in the middle of answers recorded. Even taking small steps to save money can boost your confidence and freedom of choice. You can then keep building on that foundation until you find the most comfortable level.
What about Impulse Buying?
Whenever there’s a new sale on bath bombs or a smartphone release, many might be tempted to dip into their funds to make the purchase. However, putting money aside that covers the things you care about most avoids overspending. Or, at least, it can prevent spending more than you actually can, according to your unique strategy. This was the common theme when asked about dipping into savings for less important expenditures.
Diligence and determination go a long way into achieving financial goals. Making sure you have savings you won’t touch will make sure you stay on track. Consider a high interest savings account that earns you more over time. Some of these have withdrawal limits and even limited access to an ATM to ensure the money is doing what it’s supposed to: preparing you for the future. Check out our best options here.
What Can You Do Now?
There’s never a wrong time to start thinking about your savings and how they could better serve you in the long-term. Every plan is different. Now, comes the willpower to follow through on your incentives and determine which savings plan gives you the most cushion to live comfortably. Not only that, but also, you need a plan that keeps your best interests in mind and helps you achieve financial resiliency.
One step to start taking control of your saving habits is to get a good understanding of your current credit situation and find personalized offers to help build your credit profile. ExtraCredit® by Credit.com offers an all-encompassing credit monitoring solution you may need. ExtraCredit® allows you to see where your credit stands, what products and/or services you’d most benefit from, and protect your identity from the dark web. Find out more about ExtraCredit and how it can help you right here.
Methodology: Credit.com sent a survey to its users via email asking about saving habits. The answers were collected using a third party survey tool. The above data is a result of 32 responses.
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