Over half of Americans are struggling to save. These 8 charts show how small savings can add up to big money

Written by

Alex Gailey,

Edited by

Tori Rubloff

Published on January 29, 2024 | 9 min read

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Whimsical illustration of a plant growing out of a jar full of coins

Josh Michaels, a 45-year-old marketing manager based in Phoenix, Arizona, tries to put a portion of his paycheck — even if it’s only $50 — into his savings account every month. Michaels, who makes between $60,000 to $70,000 annually, hasn’t started saving for retirement and wants to save more.

But every month, it feels impossible after paying for his basic expenses.

“The money’s just not there at the end of the month,” he says. “By the time I’m done paying for my basic bills, basic groceries and stuff like that, I’m lucky if I can put $25 to $50 in my savings account. I’m terrified of having no retirement or savings.”

Michaels is one of millions of employed Americans who are struggling to save money right now. Over half of American workers (53 percent) say it’s either difficult or impossible to consistently save enough money to feel comfortable for emergencies, retirement or any other reason, given their current financial situation, according to new Bankrate polling.

However, Michaels’ story also demonstrates that no step is too small. By consistently putting away $50 every month in a savings account over three years, he’s saved up almost $2,000. It shows that even small contributions to savings can add up — if you’re consistent and give it time. In this economy, that matters.

See for yourself: Bankrate crunched the numbers and compiled eight charts that show how putting away small amounts can add up to a substantial amount of money over time.

Successful saving is all about the habit. Establishing the habit as soon as possible, even in small amounts, is crucial. Once the habit is in place, seeing your balance grow can become self-reinforcing. — Greg McBride, CFA | Bankrate chief financial analyst

Bankrate’s insights on Americans’ savings

The majority of Americans are struggling to save. A new Bankrate poll found over half of American workers (53 percent) say it’s difficult or impossible to consistently save enough money to feel comfortable for emergencies, retirement or any other reason, given their current financial situation.
A big pain point for consumers is emergency savings. Less than half of Americans (44 percent) said they would cover an emergency expense of $1,000 or more from savings, up slightly from a year ago, according to Bankrate’s latest emergency savings survey.
Americans are also behind on their retirement savings. More than half (56 percent) of Americans in the workforce think they’re behind where they should be with their retirement savings, and 45 percent think it’s unlikely they’ll have enough to retire comfortably, according to Bankrate polling.

Why saving money feels hard for so many Americans right now

Saving money can be challenging in any environment, but it can feel especially tough for Americans who are battling with elevated prices, rising interest rates and uncertainty in the current economic climate.

More than half of American workers (53 percent) say it’s difficult or impossible to consistently save enough money to feel comfortable for emergencies, retirement or any other reason, given their current financial situation. That includes 44 percent who think it’s difficult (very or somewhat) and 9 percent who think it’s impossible.

But Bankrate’s data suggests a tale of two Americas: one where saving money feels difficult or even impossible, and one where saving money feels easy. There’s almost an equal divide among employed Americans with ease of saving right now, according to Bankrate’s data. While the slim majority of employed Americans are struggling to save, 47 percent say it’s easy to consistently save enough money to feel comfortable for emergencies, retirement or any other reason.

Many are specifically struggling to come up with the cash to cover an emergency expense. Less than half of Americans (44 percent) said they would cover an emergency expense of $1,000 or more from savings, up slightly from 43 percent a year ago, according to Bankrate’s latest emergency fund report data. Most experts recommend having enough money in your emergency fund to cover at least 3 to 6 months’ worth of living expenses.

The top reason Americans are saving less for emergencies is inflation, cited by 63 percent of all households, followed by 45 percent saying rising interest rates have caused them to save less. Over four in 10 Americans (41 percent) say a change in income/employment is causing them to save less.

McBride says the cumulative effect of inflation over the past few years has “stretched household budgets to the point where it is much harder to save or to save at the same pace you were previously, and moved the goalposts on the amount of savings it takes to feel comfortable.”

“If you’re trying to accumulate six months of expenses in emergency savings, your expenses are now 20 percent higher and so is the amount you need to save,” he says.

4 charts that show the power of small savings

With the rising cost of living, many Americans worry they don’t have enough money to set aside for emergencies, retirement and other goals. But even the smallest adjustments to your finances can make a big difference over time.

You may be surprised at how big your account can grow by putting away small amounts of money into a savings account regularly and leaving it untouched for years. That’s because consistent contributions and interest earned on those contributions can really add up. Thanks to the Federal Reserve’s rate increases, annual percentage yields (APYs) have been on the rise, making now a great time to open a high-yield savings account if you want your money to grow faster.

Bankrate’s most recent survey of financial institutions found the national average yield for a savings account is 0.56 percent APY as of Jan. 4, 2024. But many online-only banks have savings interest rates much higher than the national average savings account interest rates — as high as 5 percent APY at the best high-yield savings accounts. For example: On a $10,000 deposit, a 5 percent rate translates to $500 a year in interest, while a 0.56 percent rate is just $56 in interest.

Traditional savings accounts: A traditional savings account is the most common type of savings account, typically available at a bank or credit union. Interest rates on traditional savings accounts are generally low.
High-yield savings accounts: A high-yield savings account is similar to a traditional savings account but it typically earns you a much higher return on your money. You can find high-yield savings accounts that pay over five percent APY — nearly 20 times more than the average.

Take a look at the following four charts to see how putting away little amounts in a traditional or high-yield savings account can result in thousands of dollars over time:

Money tip: Consider doing the 52-week money challenge where you deposit an increasing amount of money into your savings each week for a year. Save $1 the first week, $2 the second week, $3 the third week and so on until you put away $52 in week 52. If you’re consistent, you’ll save $1,378 by the end of 52 weeks.

Small investments, big gains: 4 charts that show how consistency builds wealth

Saving isn’t just about covering expenses when the unexpected happens. It’s also about financially securing your future.

The easiest way to save for your future self is through a retirement savings account. According to a Bankrate survey, more than half (56 percent) of Americans in the workforce think they’re behind where they should be with their retirement savings.

If you want to put money away for your future but think you don’t have enough money to do so, think again. You can invest with as little as a few dollars a week in a retirement account. What matters more is getting started as early as possible. The more time your investments have to grow in the stock market, the more your retirement savings will be worth decades from now — thanks to compound interest.

How compound interest works: Compound interest is essentially the interest you earn on interest. You earn interest on the principal (the initial amount deposited) and on the interest that accumulates over time.

Take a look at the following four charts to see how small, repetitive contributions to a retirement account can lead to hundreds of thousands of dollars over time:

Ask the experts: How to save money on a tight budget

Bankrate asked financial experts what advice they’d give to Americans struggling to save money right now. Here’s what they had to say.

Larry Sprung: To save money, you need a budget

Founder and lead wealth advisor at Mitlin Financial

“Put a budget together, have an understanding of how much money is coming in each month and how much money is going out each month and look for opportunities to reduce expenses. You have to understand where you are in the grand scheme of things to understand how much money is left over.”

Greg McBride: Pay yourself first and automate your savings

CFA and Bankrate chief financial analyst

“Automate your savings through payroll deduction, direct deposit or automatic bank transfer. Paying yourself first is the way to make savings happen. Waiting until all the bills are paid and then trying to save doesn’t work — too often nothing is left over, and when there is, there is no consistency to it.”

Cady North: Have multiple savings accounts for multiple savings goals

CFP and founder of North Financial Advisors

“I advocate for my clients to set up multiple savings accounts for specific money goals, and then it becomes easier to visually see your progress. It’s wise to allocate your savings in part to long-term saving goals, mid-term saving goals and some things that are fun as well. Also, I wouldn’t wait to save for retirement because that’s going to need the most time to grow and compound — even if it’s starting very small, like putting 3 percent or 5 percent of your income in a retirement account.”

Learn more

Bankrate.com commissioned YouGov Plc to conduct a survey to gauge consumer sentiment on saving money. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,128 employed U.S. adults. Fieldwork was undertaken between December 18-20, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

The emergency savings study was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted between December 15-17, 2023, among a sample of 1036 respondents. The survey was conducted via web (n=1006) and telephone (n=30) and administered in English (n=1010) and Spanish (n=26). The margin of error for total respondents is +/-3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

Bankrate.com commissioned YouGov Plc to conduct a survey on retirement savings. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,527 US adults, of whom 1,301 are working full-time, part-time or temporarily unemployed. Fieldwork was undertaken between August 23-25, 2023. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.