Here’s why saving for a down payment on a home purchase is a growing challenge for many Americans: About 62 percent of Americans have less than $1,000 in their savings accounts, and 21 percent don’t even have a savings account, according to a new survey of more than 5,000 adults conducted by Google Consumer Survey for GOBankingRates.com.
“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” says Cameron Huddleston, a personal financial analyst for GOBankingRates.com. “They likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts, to cover unexpected expenses.”
Echoing these findings, a similar survey by Bankrate.com earlier this year of 1,000 adults found that 62 percent of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair. If they needed money, the Americans surveyed say they would raise the money by reducing spending elsewhere (26 percent), borrowing from family and friends (16 percent), or using credit cards (12 percent).
Among those who did have savings prior to 2008, 57 percent said they used up some or all of their savings in the Great Recession, according to a U.S. Federal Reserve survey of more than 4,000 adults in 2014.
The age group with the least amount of savings? Generation X, who are ages 35 to 54. About 31 percent from this age group surveyed reported a savings account balance of zero – the highest number of any other age group, according to the GOBankingRates.com survey. In comparison, about 29 percent of millennials – aged 18 to 34 – and 28 percent of baby boomers – age 55 to 64 – say they have no money in their savings account.
For those who do have savings, the most common savings balance is $10,000 or more (14 percent), followed by five percent of adults who have saved between $5,000 and $10,000.