While many people know they should save more, a new survey suggests some don’t believe they have what it takes to do so.
PurePoint Financial, a digital bank and division of MUFG Union Bank, surveyed more than 1,250 adults to learn more about their savings goals and get their take on their ability to achieve them. Half of respondents said one of their goals for 2020 is to create a basic saving plan. But more than one-fourth (28%) said they didn’t believe they would be successful at achieving that goal.
Pessimism, however, isn’t stopping consumers from trying. In fact, 84% of respondents said there is something for which they are saving, whether it be an emergency fund, a vacation or retirement. Some consumers recognize that their savings habits need to change, as only 2 in 5 respondents rated their current saving habits as “better than OK.”
One’s relationship status could play a role in their ability to save. Among respondents, 44% of those in a relationship said they considered their money-saving habits to be “better than OK,” compared with only 37% of singles who felt that way. Also, 29% of couples said they were saving for retirement, compared with 16% of singles.
Cynicism in savings ability runs high
Not only do consumers rate their savings skills as low, but some think they would be more likely to achieve other hard-to-reach goals than building a nest egg. For example, 28% of respondents said they believed they would be more likely to achieve their “dream body” this year than achieve their savings goal. Another 25% said they would be more likely to fall in love than hit their savings goals.
Respondents also were more confident in their ability to spend than to save, as 51% said they were more likely to travel to an exciting new place than to reach their saving goals.
When it comes to barriers to saving, subscription services were a notable culprit:
- 33% of consumers said they don’t review their subscription services on a regular basis to see how much they’re spending
- 20% have gone over budget because they forgot to cancel a subscription
- 10% have had to take money out of their savings account because they forgot to cancel a subscription service they no longer wanted
Another barrier to long-term saving success could be impatience, the survey suggests. Among respondents, 30% said they would choose to take $1,000 today rather than wait a year for $3,000. That suggests they may be willing to forgo the benefit of compound interest to receive instant gratification.
Knowing that your savings habits could be improved is the first step toward creating a better financial situation for yourself. If you’re wondering whether you are saving as much as your peers, take a look at average U.S. savings account balances. Also, make sure you’re getting the best APYs on the money you’re saving by comparing offerings from different banks.