JACKSONVILLE, Fla. — The pandemic has changed many ways we do things and according to data from the U.S. Bureau of Economic Analysis, it’s changed how much money Americans are saving.
In April 2020 when the pandemic first began and much of the country was shut down, the U.S. personal savings rate skyrocketed to 32 percent. That means Americans were saving a third of their disposable income.
It all goes back to human behavior. Our mindset back in April was focused on potential layoffs and major shutdowns. Nothing to do means nothing to spend your money on.
As of December 2020, BEA data shows Americans saved 13.7 percent of their disposable income. However, there are disparities between people who can put that money aside and people who live paycheck to paycheck.
“Remember the greatest generation always talk about living through the great depression and because they lived through the great depression, it made them realize it is important to save a buck," says CEO of Jax Federal Credit Union Mary Svovoda. "I hope that happens for this generation.”
Jacksonville Mayor Lenny Curry has proclaimed the week of February 22nd “America Saves Week” in Jacksonville making it official. It’s time to put some money into your savings.
America Saves Week has been going on since 2007 nationally and a range of organizations promote wealth health.
While we often hear experts say how much you should save up, that can be intimidating. Let’s start simple. You can start a savings account with just 5 dollars at many credit unions.
Svoboda says start with repetition. Save a specific amount of money every week and make it a habit.
“This pandemic has really been so hard for so many, right?" Svoboda says. "With losing their jobs and health concerns, but there has been a huge benefit from it. People have learned if they can curtail their discretionary spending… they’ve been able to really grow their savings.”
She says start by working towards saving 1,000 dollars for unexpected life costs like car problems.
Once you have that saved, you should save 3 to 6 months of your expenses. She says it’s a safety next in case you find yourself unexpectedly unemployed like millions did this past year.
Svoboda says visualization is helpful for new savers. You can make a savings account with a specific goal in mind like a new car.
Before you begin your savings journey, go through your checking account. Svoboda says you need to understand what exactly you are spending your money on monthly and see where you can cut.
How can saving be accessible to everyone? Many credit unions have minimal to no balance requirements. Here are a few local options:
- Jax Federal Credit Union: Start a savings account with $5
- Community First Florida Credit Union: No minimum
- 121 Financial Credit Union: Start a savings account with $5
- First Florida Credit Union: Start a savings account with $5