Are You Saving Less These Days? Find Out What You Can Do

How much money do you have squirreled away in a saving account? If this balance is lower than what you had before the pandemic, you wouldn’t be alone. New research shows nearly 80 percent of Americans have less cash today than before 2020.

2020 was a year of financial turmoil for many people. Some families are still feeling the crunch several years later, thanks to the rising cost of living.

But inflation isn’t the only reason behind your dwindling savings account. Let’s explore why you might have less cash savings, and what you can do about it.

Why Are You Saving Less?

Your savings account balance may fluctuate over the years, but a true, permanent drop in savings usually happens in specific circumstances.

Do you fall into one or all the reasons below?

• Emergencies: Using your savings to handle unexpected expenses is a good thing. That’s why you save in the first place — to be prepared in emergencies. Unfortunately, emergencies may occur faster than you can refill your savings. Even if you make regular contributions, your balance may go down because your withdrawals are larger or more frequent.
• Inflation: Your cost of living likely bumped up in the past few years, as everything costs more due to inflation.
• Wage Stagnation: Increased prices may be even harder to handle if your wage hasn’t kept pace with prices. Once you account for inflation, most American wages haven’t increased in more than a decade, according to the Pew Research Center.
• Lifestyle Creep: So far, Americans have bucked expectations in the face of inflation. Rather than reducing their spending in 2023, data shows Americans splurged frequently. From concert tickets to elaborate vacations — they spent a good chunk of their budget in discretionary spending. Unfortunately, these purchases can limit how much you can tuck away in savings. With so much of you cash going toward the fun stuff, you may neglect your emergency fund.

What to Do if You Have No Savings in an Emergency?

What if your car needs new brakes years ahead of schedule, and before you can refill your emergency fund, too? Don’t panic—while your savings provide the best way to handle unexpected expenses like auto repairs, they aren’t the only way. You can consider online direct installment loans to stand in for your savings during emergencies.

Today’s direct online lenders make borrowing easy with upfront and convenient websites that provide all the information you need to apply, like qualifying requirements and the cost of borrowing. You can breeze through an application to see if you get approved for funds you can use quickly to handle repairs and expenses.

Online direct loans are temporary stopgaps when your emergency fund is running on empty. However, they are not permanent replacements for emergency savings. While they can fill the gaps now and again, you shouldn’t rely on them for every unexpected expense.

Borrowing money for every curveball is an unsustainable way of dealing with emergencies. That’s because every personal loan comes with rates and fees, meaning you pay more to handle an expense than if you cover it out of pocket. Using your savings doesn’t come with interest or finance charges, after all.

What to Do if You Have No Savings in Between Emergencies?

When your saving start to look thin, you need to focus on rebuilding your emergency fund. If you work fast enough, you may handle your next emergency on your own dime and not have to rely on direct installment loans in a pinch.

Rebuilding your savings in today’s economy doesn’t have an easy fix. But you can turn your savings around by committing to these long-term financial habits.

• Start tracking your cash flow to see how you really spend your money.
• Unsubscribe from unused or duplicate streaming services.
• Make homemade meals from scratch, ditching meal boxes and takeout.
• Simplify meals based on sale items, weekly flyers, and coupons.
• Carpool to save on gas and try biking or walking more.
• Put a 30-day hold on any non-essential spending.
• Delay DIY home improvement jobs.
• Save money and pay bills first before you spend any other money.
• Automate regular expenses, including savings.
• Put a pause on non-essential saving (like sinking funds) to increase the size of your emergency fund contributions.
• Dip into savings only when it’s an emergency or a planned purchase for which you created the saving.
• Pick up a side gig to boost your income.
• Ask for a raise after brushing up on these tips.
• Start thinking about a career change — earning more is the best way to weather inflation while still saving money. While a raise usually nets you a 3% increase in pay at most, most new jobs earn you an extra 10–20%.

Go through this list and tick each item off, one by one. Committing to the whole list can help you weather inflation and improve your savings situation.