According to a 2015 Google Consumer Survey, approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account. Why don’t Americans save?

A few preliminaries:

  • Americans used to save. Not saving is new behavior.
  • While poverty makes it harder to save, the poor used to save a lot more.  
  • Current non-saving behavior affects all income groups.
  • The decline in savings among rich countries is global, so whatever is behind this trend is unlikely to be specific to the US.

Some theories:

1. Temporal Discounting: live for today, tomorrow is just too abstract a concept

- But in earlier times, tomorrow was even more theoretical…

2. Savings behavior is a hassle, like you’ve got to actually do it and it takes a little time and even littler effort

- A few clicks is all we’re talking about – not walking a mile to the bank

3. People underestimate the frequency of "special occasions" and emergencies

-  Most Americans report an “unanticipated expense” every year – do they just have very short memories?

Next: some better theories on why Americans save less than they used to.

References

https://www.theatlantic.com/business/archive/2016/04/why-dont-americans-save-money/478929/ Derek Fisher Why Don’t Americans Save More Money?   April 19, 2016

http://time.com/money/4417515/science-saving-emergency-expenses-behavior-economics/The Science Behind Why You Don't Save (And What To Do About It)   July 25, 2016