Where Did Americans’ Savings Go?
1,151,200
Published 2023-04-27
“Something like $2 [trillion] to $2.5 trillion above what we would have otherwise expected were saved by American households,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions.
Collectively, Americans have trillions in excess savings compared with expectations leading up to the pandemic, according to Federal Reserve economists.
Watch the video above to learn about how the personal savings rate affects you and the wider economy.
Chapters:
00:00 — Introduction
01:26 — Budgets
02:40 — The personal saving rate
05:33 — Recession?
07:48 — Ways of saving
Produced by: Carlos Waters
Edited by: Nora Rappaport
Animation: Jason Reginato
Supervising Producer: Lindsey Jacobson
Additional Footage: Getty Images
Additional Sources: Federal Reserve Board of Governors, Organisation for Economic Co-operation and Development, U.S. Bank
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Where Did Americans’ Savings Go?
All Comments (21)
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America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..
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Because it directly impacts people's cost of living, which they experience right away, inflation is much more destructive to people than a declining stock or real estate market. The severe pessimism of the market sentiment at this moment is not surprising. Help is essential if we are to live in the economy of today.
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Inflation depreciates idle money. I'm in a privileged position to be able to save almost 65% of our net household income, as I placed it on safer investments. The key for us was not spending beyond our means. If you invest and have other sources of income outside of dividends then you will be able to live off dividends. Got north of $200K in my portfolio as I bought a lot of dividend stocks before, I'm buying more now, and I will buy more when it drops further
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inflation remains well above the Fed’s 2% target. Some of the top commentators in the markets, business and economics have been sounding off on just how bad they think the next downturn might be — and how far stocks may have to fall. I need ideas and advice on what investments to make to set myself up for retirement, my goal is to have a portfolio of at least $850k at the age of 60.
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The fact that someone actually came up with a term like "excess savings" shows you how messed up the system is.
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I am regretting not investing in stocks ever since but still grateful i kept money in the money market. With about $200k maturing soon, i plan investing in the stock market. What stocks should I look into as a newbie to safely grow my money?
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This bank crisis is so far from being over. Anyone who has been around for longer than 12 years, knows a credit crisis isn't over in two weeks. Makes me laugh seeing folks thinking this was all over so quickly. We are seeing a credit contraction that is gonna lead to a major contraction.
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Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market
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What's depressing about the USA is that even if you do manage to save, it can be gone in a second for something out of your control. I spent five years saving a hefty amount "just in case." I broke my back a few months ago and now it's gone. Just like that - even though I have insurance. So what's the right amount? How do you ever feel secure?
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A lot of people are unable to save due to the cost of living being up to 50% or more of a household's income, adding in rising food costs, rising insurance premiums, everyone seems to be spending more to live, but wages have not kept pace.
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We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $480,000 savings vanish after putting in so much effort to accumulate them for my retirement.
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“Only 17% have exhausted their pandemic savings” is a hell of a way to rephrase “About 1/6th of Americans have lost their savings”
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This is the first time in 3 decades that my savings is exhausted. This is true of almost everyone I know. Costs went up and incomes didn't.
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I recently made more purchases. Saving money for a market downturn is likewise a bad idea. There are numerous ways to look at recessions and depressions, we cannot always expect to make large returns, and taking chances is better than doing nothing. The bottom line is that you will achieve remarkable results by diversifying your portfolio and making wise decisions. My portfolio's raw earnings rose by $608k in just 5 months.
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I'm an over the road truck driver. I average 2500 take home per week. No bills except my cell phone. I think this is the only way to save money. Having a 9-5 job getting "home" everyday will definitely keep you broke if you're not making at least $30 per hour. The thing I noticed about the workforce is majority of companies just don't pay a liveable wage. That's the American way I guess
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For the first time in decades, america is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio.
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School doesn’t teach anything about budgeting or finances. That’s part of the problem; we need to get experience in this early so we don’t destroy our finances the hard way.
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High interest rates, junk fees, inflation and the list goes on and on.
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Certainly! I understand that living expenses and taxes can take up a significant portion of one's income in the UK, which can limit how far that income can go. Even 100k doesn't get you very far. So, what do you believe defines a person as being 'rich'? Is it simply being able to live comfortably above the standard and being financially secure, or does it also include having the ability to pursue expensive hobbies and travel frequently?
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What should be on everyone's mind currently should be to in vest in sectors with guaranteed projected growth. Hard truth is that you can't always win with the market, just make sure your W's are more than your L's
