Americans’ desire to save money rather than spend it may help those vowing to show more financial restraint in the new year, as reported by Gallup.
“Still, this desire may not translate into more savings in 2014, as those with the least resources in terms of disposable income are actually the most likely to prefer saving money to spending it. This may mean that even as much as the country professes to enjoy saving money, not all are able to do so for financial reasons.
“In fact, Americans with the absolute lowest annual household incomes, $20,000 or less, are the most likely to say they enjoy saving money (66%) rather than spending it (30%), compared with Americans at other income levels. The propensity to save drops off notably among those bringing in $50,000 or more, though the majority still lean that way, including 56% of those with household incomes between $50,000 and $74,999 and 55% of those earning $75,000 or more.
“These results come from aggregated Gallup data spanning 2009 to 2013, including interviews with 6,127 U.S. adults. Particularly since the 2008 financial crisis, the majority of Americans have said they prefer saving money to spending it. This stands in contrast to their preferences between 2001 and 2008, when they were more evenly divided between saving and spending money. Even as the economic recovery nears its fifth year, the preference to spend rather than save has not recovered to pre-crisis norms.
“According to the U.S. Census Bureau, the median household income in the U.S. was $51,017 in 2012, the last year for which data are available. Notably, individuals reporting this level of income or less are very likely to say they prefer saving their money (63%).
“This may be more of a reflection of the discomfort that people with limited funds feel about spending money than an indication that they are disciplined savers. Inclinations aside, many of these individuals may not be able to save because of income restraints. However, this paradox could be one reason the official personal savings rate — personal savings as a percentage of disposable personal income — has grown only modestly since 2007, averaging 5.5% per year from 2008 to 2013. By comparison, from 2001 to 2007, the personal savings rate averaged 4.0%.”
More at: http://www.gallup.com/poll/166643/saving-popular-among-lower-income-americans.aspx?utm_source=tagrss&utm_medium=rss&utm_campaign=syndication&utm_reader=feedly