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Is It a Good Time to Save Money? 91% of Americans Think So
By Mary Ellen Cagnassola MONEY RESEARCH COLLECTIVE
Indeed, yields on savings products have skyrocketed thanks to the Federal Reserve’s inflation-busting rate hikes.
Most Americans feel that it’s wise to save money right now amid a rise in concern about their finances, according to new poll results.
In a Wells Fargo survey of roughly 3,400 adults and about 200 teenagers, the majority of respondents said they are worrying more about money lately. Many even said they feel embarrassed by their financial circumstances — which may be leading them to lie about details like their saving and spending habits.
Americans are worried about money — but trying to save
More than half of respondents said they’re able to live within their means without worrying about making ends meet, but at the same time, only 40% said they’re in good or great shape financially. Almost a quarter reported that they’re in poor financial shape, and roughly 1 in 3 said they’re spending more than they can afford every month.
However, 37% of respondents overall said they’ve been putting more of their money into savings and investments recently. Ninety-one percent said it’s a good time to save money, and they’re right about that: Annual percentage yields on savings products have skyrocketed in the past couple years thanks to the Federal Reserve’s inflation-busting rate hikes.
Only 14% of respondents said that it’s a good time to borrow. With annual percentage rates (APRs) on credit cards hovering above 22% and mortgage rates around 7%, we can’t say we blame them.
By increasing interest rates, the Fed effectively makes borrowing money more expensive — and saving it significantly cheaper. Case in point: Some high-yield savings accounts are now offering APYs of 5% or more, and the best CDs are offering rates of 4.70% and higher on terms lengths from six months to two years.
The Federal Reserve is expected to start cutting interest rates this year now that inflation is cooling, although experts don’t expect them to go down much. For now, it’s anyone’s guess when — and by how much — rates will decline.
Lies, darned lies and statistics
The findings suggest that Americans’ lack of confidence in their financial circumstances may be leading them to stretch the truth. In the survey, almost a third of U.S. adults admitted to having lied about how much they spend, and 28% reported having lied about their savings.
Teens were even more likely to say they’ve been dishonest about money matters. Half of the 14- to 17-year-olds surveyed said they’ve lied about their spending, while 42% said they’ve lied about their savings.
Overall, more than a quarter of respondents said they’ve lied about how much debt they have, and a similar share have lied about their income. Most respondents said that money is personal to them, with 65% saying they’re reluctant to talk about their savings and 62% saying the same about their income.
In fact, Americans are so awkward when it comes to talking about money, they ranked finances as more difficult to discuss than death, politics, religion, their health and taxes.
“I believe that the root cause of people being reluctant to discuss money is that it reveals more about who they truly are, and that can make them uncomfortable — so much so that they are willing to lie about aspects of their financial life,” Michael Liersch, head of advice and planning for Wells Fargo, said in a news release.
But there’s a bit of good news. While they may not feel completely secure at the moment, about 60% of people said they’re happy with their “money story” — or how their finances inform their life narrative — so far, and 73% said they feel optimistic about where it’s headed.
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Mary Ellen (M.E.) Cagnassola joined Money as a reporter in 2022 following several years covering local communities in her home state of New Jersey and U.S. news for national brands, including Newsweek and People. Since receiving a B.A. in English and journalism and media studies from Rutgers University in 2017, M.E. has written about pretty much everything under the sun. As the versatile lead reporter for TAPinto Newark from 2019 to 2021, she won awards from the Center for Cooperative Media and the Society of Professional Journalists-New Jersey for her coverage of COVID-19, domestic violence, homelessness, eviction, police brutality, city government and more. She served on the board of the Society of Professional Journalists-New Jersey from 2021 to 2023. Her time at Money has afforded her newfound experience reporting primarily on Social Security policy, retirement, housing, lifestyle and employment. Influenced by her origins in community journalism, M.E.'s consumer finance coverage is informed by her dedication to service and equity. Some of her favorite topics that she has covered so far include the financial toll of caring for aging parents, sales taxes on diapers and period products, the booming personal loan industry and the customer service crisis at the Social Security Administration. Sometimes, M.E. makes TikTok videos for Money with her cat and Money’s in-house acting talent, Willow, from their home New York City.