Thanks to Central Banks, saving rates are declining worldwide

Savings declining worldwide


Saving rates are declining worldwide

The media has again begun focusing on the fact that most Americans surveyed have less than $1,000 in their savings accounts. On Sunday, USAToday reported on “America’s spend-first mentality” and last week, CNBC suggested that 34%  of Americans “have no savings at all.”

The statistic that most Americans have less than $1,000 in sort of liquid emergency fund stems from a 2015 study by GoBankingRates which concluded that 34% of Americans have zero dollars in a savings account while 35% have between one dollar and $1,000 dollars.

For those who have little in a savings account, this doesn’t mean their net worth is necessarily zero or negative, of course. Some of those people own property (such as real estate and securities) outside their savings account.

Nevertheless, the implication is that most Americans can’t even deal with a small $500 automobile and health care bill in an emergency.




For a country that has one of the world’s highest levels of disposable income, this is a grim figure.CNBC even goes on to note in a September 2016 article that, according to a study by the Economic Policy Institute, the median retirement savings among all American families is a measly $5,000

According to OECD data, the US had a household savings rate of 5 percent in 2014, which places it higher than the EU overall (3.8 percent) and higher than Canada. Full Story

Saving rates are declining worldwide: Outlook Was Better in the 50’s

Wowza! The average household in 1950 was actually spending a higher percentage of its income on food than on housing — and not because housing was extra-cheap. We’ve gone from spending a quarter of our budgets on food in 1950 to spending less than a 10th in 2016. We’ve done this even though we’ve doubled the share of our food budget that goes to dining out, rather than parsimoniously cooking at home. Yet in 1950, despite having to spend one-fourth of their income just feeding themselves, Americans managed to save nearly 10 percent of personal disposable income. Full Story

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