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Trigaux: Why can't we save enough money? After decade, surveys warn savings habits still eroding

Published Feb. 27, 2017

Anyone who pays attention to the avalanche of personal finance warnings about America's inability to save money might think they have heard it all already.

Not enough people save for the basic emergencies of day to day life, let alone sock away money for retirement. We've written and read versions of this unnerving theme for years.

Now comes a fresh and painful analysis from the Consumer Federation of America and American Savings Education Council. Their findings? After a decade of annual surveys, the country's savings habits are still continuing to erode.

Experts assumed that savings trends would rebound after the recession and during this recovery back to the levels seen in 2008, Consumer Federation executive director Stephen Brobeck said in a national conference call Monday. But it has not happened.

"There's been no such recovery in savings habits," Brobeck said, citing survey findings. While 62 percent of those surveyed in 2008 had established savings plans with specific goals, that number fell to 46 percent in 2017, he said. And the percentage of those who saved for retirement at work also has dropped — from 55 percent a decade ago to 46 percent now.

"I do not have a good explanation for this but it is very troubling," said Brobeck, a co-founder of America Saves Week, which kicked off Monday on a week focused on financial ideas and encouragement to boost savings. "The long-term trend is unstable," he warned.

Here's one possible reason. The deep recession and housing collapse of 2007-2011 destabilized many households, undermined financial confidence of even more and hurt many forced to replace lost, decent paying jobs with one or more jobs that pay far less.

Among those surveyed, only 48 percent said they save at least 5 percent of their income. In 2008, 53 percent did. Only 7 percent of those with incomes topping $100,000, but 53 percent of those making less than $25,000, said they were saving nothing at all.

Brobeck said research showed even low-income households can save small amounts, at least enough to set aside for such basic emergencies as fixing a car or an unexpected trip to the dentist.

Better to save a little, even at today's low interest rates, he said, than to end up with a payday loans that can charge triple digit rates.

The latest study comes a week after the United Ways of Florida announced that more than four of every 10 households in Florida — 3.3 million of the state's 7.5 million households — are struggling to make ends meet.

Savings, meant to be a necessity, remains a luxury for too many.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.