Can this be true??

[Ima saver]

I just read in a book, that 80% of the population has never had a savings account!! Can that be true??

[Broken Arrow]

Good lord, I hope not!

[JoyJoy]

I would disagree with that. Perhaps 80% haven't added to their savings account since opening it lol. What book was that Ima?

[creditcardfree]

Are you talking about the world population or United States? It could be an accurate figure if it is based on the worlds population.

[rob62521]

I think it could be true here in the U.S. Think about many folks who don't use banks, but use the currency exchanges and get money orders to pay for things. A lot of people in poverty don't know how to use the services a bank or credit union offers. It is a scary thought!

[Ima saver]

The book was called, make your paycheck last. I am sure he was talking about americans, but I find that hard to believe. I do live in an area where very few of the locals, that I know , have a savings account or a checking account. They use money orders.

[poundwise]

Seeing as how most bank savings account pay less than half-a-percent interest and charge a maint. fee, I wouldn't recommend one to anybody.

Of course, online MMA offerings represent a viable option for saving money but the typical bank savings is practically worthless IMO.

[JBinKC]

I am curious of the date of this survey if it was done when rates were under 1% there would be little incentive to bother with a savings account when rate spreads between the different vehicles were very small.

If the survey was done after the rise in rates. I would still believe it as I think the you have a higher rate of people not having the funds to save at all and the those who are able to save have the sophistication of finding a better vehicle for their idle cash. The rate arbitrage for a bank on a bank savings account yields them the highest margin.

I think the last time I had a savings account is when I was an adolecent. With my short term cash I try to maintain as little in my checking account to maintain everyday cash flow and with my excess for longer term bills like property taxes, insurance etc I stagger 28 day treasury bills which are purchased in discounted increments of $1000.

[Mathew Green]

Originally Posted by Ima saver

I just read in a book, that 80% of the population has never had a savings account!! Can that be true??

Based on the people I know (and all the other assorted disclaimers) I'd say the survey is correct. In fact if you exclude savings accounts opened while the person was a minor because some adult insisted on it or funded it, I'd guess the 'never had' figure is 90-95%, and I include in that CD's and similar savings-account substitutes. We're simply not a nation of savers; and as someone else pointed out, a large segment of the population has never had a bank account of any type.

There's also the truism that "rich people invest in financial assets and poor people invest in things." IOW rich people buy stocks, middle-income people buys mutual funds or CD's, and low-income people stock up their pantry or buy tools to make their work easier. Not a lot of demand for savings accounts now that anyone with $500 can open a brokerage account and anyone with $100 can put it in an IRA, 401k, or mutual fund. It's a very different world from the one I grew up in during the 1950's and far far different from the "It's A Wonderful Life" savings-and-loan world my parents used to live in.

I believe it was Will Rodgers who said, "If you put aside a little money every month, at the end of a year you'll be amazed at how little it is." Most people I've known feel exactly that way about it. People who frequent forums like this are the exception in America and "Living Beyond Your Means" is far more popular than "Living Below Your Means".

So I suspect the only 'savings account' most people will ever have is the slush left in their checking account after their monthly bills are paid. Anything beyond that is either spent or transfered to an investment account.

--->> Edited 9/7/06 to add: Information has come to my attention that proves my opinion was wrong. (oops!) So, I hereby retract it. However to preserve the continuity of this thread I'm leaving my original messages exactly as they were written. For my new opinion, see my message dated Sept 7th.

[Ima saver]

This book was written and published in 1990. my guess is, they did not count minor children or people with only a few dollars in a savings account.
Now I have money in a savings account that pays more than 4% and the majority in a money market account that pays 5.25% I consider that a savings account because the rate is steady, although it could go down.

[disneysteve]

I don't have a savings account. And I'm actually not certain that I ever did. I might have had one back in grade school days, but at least since college, it has just been checking. I do have a couple of money market mutual fund accounts but that probably isn't what they were counting as "savings" accounts.

Lots of lower income people don't use banks, often because they don't have enough money to avoid fees. There is a United Check Cashing store right near my office. Every Friday, the place is non-stop activity as all the local residents come to cash their paychecks and buy money orders to pay their bills. Same thing happens at the beginning of the month when the seniors and folks on disability get their government checks.

So that data doesn't surprise me.

[Ima saver]

None of the poeple that work on and off for us, have savings or checking accounts. I would not consider them low income because we pay them $15-$18 an hour and up. but they all live like they are low income. They cash their checks at my bank and I assume they have to pay to cash the checks!!

[disneysteve]

Originally Posted by Ima saver

I would not consider them low income because we pay them $15-$18 an hour and up.

$15/hour x 40 hours/week x 50 weeks/year = $30,000/year.

And that assumes a 40 hr work week with consistent work year-round. If you are talking about contractors, their work may be more inconsistent than that. Knock off a couple hours/day or have them out of work a few weeks/year and they certainly are low income. Add in the fact that they may not have any benefits - health insurance, disability coverage, retirement plan, etc. and their situation is even worse.

[J.M. Hirsch]

Kris10Leigh -- I'm a reporter working on a story about candy in schools -- saw your post on this on another forum. Can I e-mail you a question off forum?

[markio26]

i believe the numbers are startling... we think alot of ppl. hide their money and don't even put it in a bank.... if they do use a bank they use a family or friends account...

[Broken Arrow]

Originally Posted by J.M. Hirsch

Kris10Leigh -- I'm a reporter working on a story about candy in schools -- saw your post on this on another forum. Can I e-mail you a question off forum?

You may be who you say you are, but just for the sake of general safety, can you please provide some information about yourself? For example, what is your name and what paper do you work for?

[Gruntina]

Honestly, I have had savings account but have been in and out of them throughout the years. I dont know anyone in my family that has a saving account. (hearsay info only)

[thekid]

Things might be quite different here in Canada. I don't think I've ever known anybody without a savings/checking account. It's not a place to leave substantial amounts in, but it is used by almost everyone I know to deposit cheques, direct deposit salary, make purchases with debit cards, make monthly payments from, etc. From my experience, not having such a account to "centralize" these ongoing operations would really complicate things.

[greedy4chips]

80% does seem a bit high, but when you figure in all the people without any savings whatsoever and those who are too rich to want a paltry return on a savings account I can actually see where they get the 80% figure. What I cannot believe is that so many people 35 and older have never had a savings acct. There used to be a time when all savings accts paid in excess of 5%, of course mortgages were twice that amount. Perhaps some people's idea of a savings acct is paying off their mortgage faster...nah. I just think too many people have so little left over after paying the bills and investing in retirement they don't have anything left for a savings (deflating) account.

[Ima saver]

When i work in a savings and loan, our regular savings account paid 6% and our daily one paid 5.25%
Our workers really are paid pretty decent for this area. His main worker is paid $18 and could work 15 hours a day, 7 days a week, if he wanted to. My husband has not been out of a construction job in 22 years, so they could make decent money.
His main worker is in his late 40's, has no checking or savings account and still lives at home for free!