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Updated on Monday, August 31, 2020
August Savings Index: Consumer Savings Stays Steady
The percentage of U.S. consumers who added money to their savings fund in August stayed steady at 39%, down just one percentage point from July but up one percentage point from June. While the current savings rate is slightly below the May spike that appeared after relief checks were deposited into millions of consumers’ bank accounts, it marks a significant improvement from the drop in savings that happened at the beginning of the COVID-19 pandemic in the U.S. Meanwhile, the percentage of consumers who withdrew money from savings in August – 23% – reached its highest point in the 11-month history of the savings index.
Every month, MagnifyMoney surveys more than 1,000 consumers to find out whether or not they added money to their savings account and what they’re currently saving for. The results comprise our monthly savings index, which began in October 2019.
- Just under 4 in 10 (39%) of consumers saved money in August, while 23% withdrew money from their savings account. That’s the highest withdrawal rate we’ve seen since we began our monthly savings index 11 months ago.
- The number of consumers saving for medical procedures nearly doubled over the last month, reaching 11% in August versus 6% in July. That shift was driven primarily by Gen X, as 23% are saving up for medical costs.
- Americans are already starting to save up for the holidays. At 13%, the holiday savings rate reached its highest point since December.
- A major savings gender gap remains. Just under half (49%) of men saved money in August, compared to only 30% of women.
- Those who were laid off or furloughed due to the pandemic actually saved more money than those whose income was not impacted, at 50% and 42% respectively. This suggests that laid off or furloughed workers may be stashing money from unemployment benefits.
What consumers are saving for
General savings and emergencies have topped Americans’ savings lists since we began tracking the monthly savings index in October, and this month is no different.
Beyond that, about 11% of consumers are currently saving up for medical procedures or expenses, which is the highest savings rate in this category in the history of the index. Additionally, Americans are starting to save up for the holidays, with 13% currently doing so, which marks the highest point we’ve seen in this category since December.
Generational differences in savings goals
Consumers’ savings needs change significantly as they reach different life milestones, which is why it’s no surprise that their savings needs differ from age to age. Aside from general savings and emergencies, these are the top categories each generation is saving for:
- Gen Z: College (33%), new car (25%), new house (19%)
- Millennials: Vacation (23%), new house (21%), new car (16%)
- Gen X: Vacation (27%), new car and retirement (both 26%)
- Baby boomers: Retirement (22%), vacation (13%), home repair and new car (both 9%)
- Silent generation: Retirement (15%), vacation (11%), home repair and medical procedures (both 8%)
Gender gap in savings habits remains
Men continue to save at higher rates than women, with 49% of men saving in August versus only 30% of women. It’s worth noting that men also took money out of savings more than women, but still, nearly a quarter of women (24%) said they do not have any savings at all, compared to just 12% of men.
Overall, there is absolutely room for improvement in Americans’ savings habits, especially given the pandemic’s economic impacts are far from over. Every dollar you add to savings makes a difference. Even saving just $5 per week adds up over time – especially if you’re able to open a high-yield savings account offering a competitive interest rate.
MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,050 Americans, with the sample base proportioned to represent the overall population. We defined generations as the following ages in 2020:
- Gen Z as ages 18 to 23
- Millennials as ages 24 to 39
- Gen X as ages 40 to 54
- Baby boomers as ages 55 to 74
- Silent generation as ages 75 and older
The survey was fielded Aug. 14-18, 2020.