Do you feel that you are struggling to save money? You are not alone. Compared to pre-pandemic levels, households are saving far less.
In 2019, the Bureau of Economic Analysis estimated that households saved 7.3 percent of their disposable income. This year, that figure averaged 5.18 percent, while higher than the 4.7 percent in 2023, it has fallen in recent months.
Though prices have slowed their increases, they are still increasing, with the Bureau of Labor Statistics reporting a 1.9 percent rise in the Consumer Price Index since the beginning of the year. Inflation harms workers and households by reducing their purchasing power. Since wages do not rise with inflation, workers can make less in real terms, making it harder to save.
That is to say, if you had been able to save more a few years ago and you are finding it harder now, the economic conditions are not working in your favor. Aside from getting a raise or a new job with higher pay, we can offer a few tips to save.
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What experts recommend workers save each month
Most financial experts recommend saving twenty percent of one’s income. The BLS reported that median weekly earnings in the US in the third quarter of 2024 were $1,165. If we divide this figure by 40 hours in a workweek and multiply that figure by 2080 (the number of hours worked by a full-time employee), we get an annual income of $60,580. If we divide that figure by 12 (months in the year), we get a monthly income of $5048. With that income, experts would recommend saving $1009.
Wages are lower for those without a high school diploma or a college degree, with can make saving even harder.
Tips and tricks
Some of the best tips from financial experts are to cut back on unnecessary expenses, like driving when you could take public transit, eating at home, and saying no to impulse shopping.
Saving when you spend
Another option could be to put the same amount in your savings anytime you order out or make a new purchase. That way your account balance might entice you to make fewer purchases before your next paycheck arrives.
Turn on ‘round up’ feature in your banking app
Some banks have a feature that allows customers to round up their purchases to the next dollar and send that money to a savings account. With this model, you save little by little, and you may not notice the funds leaving your account like you do when you send a higher sum to your savings.
What else you might want to consider…
However, if you are in a more complicated financial situation where you have already made adjustments to your spending and still can’t save, it may be time for more dramatic options. What field do you work in? When was the last time your wages increased? Could you make the jump to another better paying industry? Do you have a union to bargain with your coworkers collectively? You may need a more structural solution.
