Question of the Day: Since March of 2020, which month saw the highest U.S. personal savings rate?
Answer: April of 2020 when personal savings rate hit 33.8%
- Why do you think the savings rate peaked in April of 2020? [Time article explains why]
- Do you think these savings habit will stick in the long-term? Why or why not?
- What do you think is a good saving target to aim for personally?
Behind the numbers (Time):
The U.S. personal saving rate — the percentage of people’s income remaining each month after taxes and spending — skyrocketed to a record 32.2% in April, up from 12.7% in March, according to the U.S. Bureau of Economic Analysis. At the same time, consumer spending fell 12.6% as the economy slowed down and unemployment rose.
Data from the Federal Reserve Bank of St. Louis shows the previous record American saving rate was 17.3% in May 1975, at the tail end of a recession spurred by rocketing gas prices, government spending on the Vietnam War, and a Wall Street stock crash. Over the last 10 years, it has hovered in the 6-8% range.
Looking for ideas on effective ways to build savings habits? Check out NGPF's On-Demand: Savings Tools & Strategies.
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About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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