One in five Americans rank their capacity to save money as “fair” or “poor,” according to new data.
Men are more likely than women to assess their money-saving abilities as above average (55% versus 39%), according to a survey of 2,000 working men and women.
And although their trust in their ability to save varies, half said they would take financial advice from a woman as seriously as from a male.
People are typically motivated to learn about their finances in order to guarantee their financial future (62%), increase the value of the money they already have (60%) and avoid dependence on others (54%).
The survey, conducted by OnePoll for BOK Financial, revealed that the typical person began saving money at the age of 24 and learnt how to best handle their finances from their parents as children (23%) and when they first began living independently (22%).
And they would advise others to begin even earlier, as soon as they receive an allowance or monetary gifts as a child (32%) and as soon as they obtain a job that generates revenue (24%).
However, only 21% of Americans answered that saving money from each paycheck is a top priority, with men placing a higher value on this than women (59% vs. 44%).
Therefore, one in eleven respondents do not feel financially secure for the foreseeable future. Respondents believe that 30% of their monthly income is spent on bills and other compulsory monthly expenses such as rent and auto insurance, and almost half (49%) say their monthly expenses are even higher.
The average employed person claims to save around a quarter of their income (26%), although more than one-third of respondents confessed saving less than this (36%).
The least popular options are certificates of deposit (CDs) (38%) and investment accounts that hold equities and bonds (32%).
According to Kimberly Bridges, head of financial planning at BOK Financial, “the right savings vehicle for you depends on your goals.” For short-term objectives, such as saving for a down payment, a savings or money-market account may be optimal. A financial planner can sit down with you and make recommendations based on your entire financial situation.
63% of respondents have a “emergency fund” (a reserve of money to be utilized when regular income is interrupted or reduced), with men more likely to have one than women (69% vs. 55%).
Those who have an emergency fund estimate that it contains around five months’ worth of income.
In a similar vein, 50% of those surveyed have begun saving for retirement in a 401(k) or 403(b) plan supplied by their employer. And another 34% save their savings in an individual retirement account (IRA).
37% of respondents are aiming for an even earlier retirement age than the norm of 59 years old.
Respondents stated that they wish to retire earlier than the 66-year-old norm because their “savings will be sufficient,” they want to “live a healthy life without working,” and they believe they “should be enjoying what I have worked for.”
“The pandemic prompted many individuals to evaluate what they consider to be the most important aspects of life,” said Bridges. It is feasible to retire early, but you must have a specific strategy in place for how you will handle your finances for the remainder of your life.
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