This Is How Little the Average Person Actually Saves (Concerning)

About this Video

• Video Title: This Is How Little the Average Person Actually Saves (Concerning)
• Channel: Chris Invests
• Speakers: Chris (assumed, as it's a solo channel)
• Duration: 00:08:45

Introduction

This video discusses the alarmingly low average savings rate in the United States, which is far lower than most people realize. The speaker explores the reasons behind this low rate, going beyond the obvious factors and examining the impact of rising living costs, easy credit availability, lack of financial discipline, lifestyle inflation, and a lack of basic financial knowledge.

Key Takeaways

• Low Savings Rate: The average American saves only about 4.5% of their after-tax income, a figure that includes retirement contributions, savings accounts, investments, and debt payments. This is significantly lower than historical rates.
• Contributing Factors: Several factors contribute to this low rate, including rising living costs (housing, healthcare, education), easy access to credit (credit cards, car loans), lack of financial discipline and planning (impulse spending, not tracking budgets), and lifestyle inflation (spending increases proportionally with income increases).
• Impact of Income: High income doesn't guarantee high savings. Many high-income earners still struggle to save due to lifestyle choices, unexpected expenses, and poor financial habits.
• Importance of Habits: Consistent saving habits are crucial. Small, regular savings efforts are more effective than infrequent large savings attempts. Automating savings can significantly improve saving success.
• Future-Self Fallacy: Relying on a future, more disciplined self to save is ineffective. Current habits and behaviors determine future financial outcomes. Focusing on immediate action is more effective than delaying.