Kind of a stupid statistic, how much people have in their savings account. With interest rates so low, a savings account is basically worthless. The more interesting question is how much they have saved in total, across all accounts and investments.
If you've got account fees on your savings account you need a new bank. Hint - just because there's one on every corner and their headquarters is a 40 story building downtown doesn't mean it's a good bank.
Local banks and credit unions are almost always better for you and your money..
For instance, Wells Fargo's Way2Save has 0.01% interest (compounded daily at 0.000000274%), and a $5 monthly service fee for minimum daily account balances less than $300.
So if you deposit $299 on 1 January, and are over 18, you end up with $239 on 31 December. Yay for that -20% interest rate. So make sure you deposit that extra $1 to hit $300. But if the daily-compounded interest is rounded to the nearest $0.01, you don't even get any interest unless you have a balance of $18250.91 or greater. In order to get the minimum possible $3.65 daily-compounded interest on a balance of $300, the APY has to be at least 1.2167%.
Just be honest and say the rate is 0%, man. It's no wonder all those Wells Fargo employees had to commit fraud to open more of those accounts. PT Barnum's maxim notwithstanding, there just aren't enough suckers in the world to open a new Way2Save account of their own volition.
My spouse recently suggested that we open savings accounts for the kids, so I pointed out the abysmally low effective interest rates on accounts . We're opening investment accounts for them instead. Kids, the way to save is to dump everything in index funds and forget it's there.
In fact, these days some checking accounts pay more interest than a savings account. And even if they don't, not much point in keeping a separate savings account if it doesn't pay any better than a checking account. (Other than for organizational reasons.)
That said, despite the savings-account-specific question, I suspect the statistics would look quite similar if you made the question less account-type-specific and just asked how much money people had saved away.
If you do a lot of transactions from your checking account, and only occasionally transfer from savings to checking, then the former is more likely to be compromised than the latter.
This difference increases if you use your checking account online, at via third party pin entry devices, or even at your bank's ATMs while only accessing your savings account from a teller in your bank. All of the former methods of access can be compromised and you can lose the contents of your checking account -- which would be limited if you didn't keep all of your money in your checking account.
Unlike credit cards, bank accounts aren't protected against theft or fraud, so the risk of theft is a real possibility that could cost you.
True. On the other hand, if the only thing you ever use your checking account for is to receive direct deposits and pay your credit card bill, then adding a savings account to that doesn't really improve your security.
I'd definitely recommend not doing any transactions from the same account that you keep most of your money in; have a layer of insulation. Don't use a debit card or a bank-account-backed "credit" card.
I just did exactly this myself. So many people say that you'll make so much more in the market, but 1% guaranteed feels so much better than maybe something more.
Unless you're looking to buy a house in 5+ years putting your down payment in the market is super risky. When you have $100k+ in a savings account $1k/yr isn't bad.
How much they have in a savings account? Who has a savings account? I have $5 in my savings account because my credit union makes me. It has around a 0.025% interest rate so I would be stupid to put any more money into it.
It's not so much that dollars are the problem, it's that there are more lucrative ways to store money, ways which actually get returns. Savings accounts today are just a slightly more secure way of hiding money under the bed. Whereas if you invest it in basically anything else, you'll have a much better chance of it increasing, with often times very low risk of it decreasing. Modern savings account plans are the real problem here.
To explain a bit more what I mean by interest rate risk: Imagine I buy $1000 in EE bonds today. Then tomorrow, conditions change, and the government starts selling 20-year bonds with a 7% rate. My bonds are now worth much less than $1000 -- no one would buy them from me on the open market, except at a substantial discount, since they could just buy the higher-yield ones for $1000.
These conditions that led to a higher interest rate are probably also leading to a higher inflation rate. So my $1000 is locked up for 20 years in an instrument where it's decreasing in real value.
Well, depends on what "risk" means...default risk? Inflation risk? How about currency risk? What if the dollar gets weaker? You need a totally different hedge for that...a savings account would not help.
You also nicely elide that since a savings account currently averages a 6 basis point APY[1], it's already giving an inflation adjusted negative return. So a savings account has gone past the "risk" stage to the "losing money" stage.
But you wanted to know "What gives higher returns but near-zero risk?" and assuming by "risk" you meant "default risk" there you go....a high interest low denomination savings instrument backed by the federal government.
Index funds, through a reputable and low-overhead fund like Vanguard's; you'll never do worse than the market. They can absolutely go down, so don't put any money in them that you might need right away, but as a long-term investment, they'll always give you a rate of return approximating the overall economy.
I don't deny that there are better investment vehicles than a savings account. I'm just asking whether there is something of similarly low risk with a better interest rate. Stocks are definitely not lower-risk.
Index funds aren't individual stocks. They're pretty low risk. If an index goes to 0, T-Bills, CDs, and cash won't be worth anything either, you'll need shotgun shells, generator fuel, and canned food.
Index funds are stocks. The market contracts - frequently. Over long periods of time its gone up.
See the chart below [0] - If you invested all your money in 1965, there is only a 8 year window at the end of the 90s where you would have averaged a 3% return per year. Much of the rest of the time you're looking at negative returns.
If you invested at the worst time in the past century that would be bad. If you invested in T-bills or CDs you'd have gotten murdered by inflation in that period too. NYT piece you're referencing says the average annual return over 20 years is 4.1% net of taxes, fees, and inflation. Not too bad.
This isn't what "near-zero risk" means. Near-zero risk investments are things like savings accounts, CDs, and T-bills. Index funds that track stock-based indexes are intrinsically risky, as you yourself point out, unless you look at time scales of a decade or more.
Near-zero risk of what? If you mean "risk of decreasing in value", then checking and savings accounts aren't near-zero-risk either; cash tends to decrease in value over time due to inflation, and you're nearly guaranteed to lose money over time (though somewhat predictably). If you mean "risk of disappearing completely", then neither a savings account nor an index fund will do that.
A comment further up the thread asked for "very low risk"; the reply to that changed it to "near-zero risk".
Better to consider the type of risk you care about, and how much money you want associated with each type of risk. Checking accounts and index funds both make sense as part of an overall strategy. I don't know that savings accounts do, though, except perhaps as a purely organizational tool.
Short-term federal debt funds like VFISX and VSGBX have very low risk and do better than most savings accounts. The risk is probably close enough to zero for most people, considering it's basically all interest rate risk on short-term U.S. federal government bonds.
Most Americans aren't constantly moving dollars between investment accounts to eek out more interest (a terrible idea for many reasons!). In a world of negative interest rates, US savings accounts aren't so bad. The problem is most don't have adequate savings.
You're probably thinking to deeply about this. I think most people are "storing" their money in consumable assets that they are likely immediately consuming - aka broke. Thinking about what you have your money in is pretty high level for a lot of people I think.
It's kind of difficult to fully read this 2011 survey since "percent holding" and "median value" is in two separate tabs, and it's hard to get a good sense of correlations. But the spreadsheet seems to show:
- Almost 70% of people owned a savings account, with a median value of $2,450 overall.
- 29% of people own a checking account, with a median value of $600
- 85% of people own a motor vehicle, with a median value of about $6,800
- 65% of people own a home, with a median equity value of $80,000
- 42% of people have a 401k, with a median value of $30,000
- 29% of people have an IRA account, with a median value of $32,000.
By far, it appears that housing is the most valuable asset many people own; at least, in every category, the median for housing is higher (sometimes up to 6 times higher) than the median for a 401K account. Also, it seems that a far more percentage of people have houses compared to 401Ks, the next largest category with >$10K median assets.
The later point makes me wondering if future generations' preparation for retirement may be impacted. The former is not a bad thing if you do have liquid assets for emergencies etc, but I can imagine there is a significant percentage which do not. (A 401K really isn't a great "liquid asset" for instance, and some probably don't have much of that.)
That percentage for checking accounts is extremely low, and suggests that half of homeowners don't have checking account, and only a third of car owners do.
I cant reconcile how that large of a discrepancy is possible. Surely some people inherited houses or cars, or paid literal cash, but it cant be that many.
edit: This FDIC report [0] from earlier this month suggests only 7% of households are "unbanked", meaning they dont have access to a bank account (doesn't specify what type). That number makes way more sense.
According to my dad, savings accounts used to actually be worth using when he was a kid. The interest rate meant you would actually earn a (relatively) substantial amount of money if you put extra cash in there and left it for 10 or 20 years. But these days you'd only have gained a few dollars in the same amount of time. Savings accounts are pointless now.
Even a decade ago, "high-yield savings accounts" were a thing, earning 5% interest. But that occurred during a time when the federal funds rates were quite high as well, and inflation had a comparable rate, making the interest rate illusionary.
In practice, savings accounts are never likely to significantly outpace inflation.
Well, and for fairly long stretches of time over the past fifty years or so, money that you stuck under the mattress or otherwise in non-interest bearing accounts was taking a fairly substantial hit in value every year due to inflation. Currently, the return on just about any near-zero risk investment (CDs, Treasuries, bank savings accounts) is so near zero return that it's probably not even worth dealing with for any modest sum of money.
I suspect there was an element of access and liquidity, especially for small amounts. It was a lot easier back then to go to your local bank to ask your teller to put money into your savings account than buy bonds, stocks, etc.
Nowadays with e-trade and the like, it's as easy to use much more sophisticated investment mechanisms than back then.
That has zero to do with it. Interest rates around the globe are much lower than they were in the past (to the point of trillions in negative interest bonds where if you hold to term you're guaranteed to not get back your investment!). There is currently too much cash in the world without good places to put it, hence plunging yields. The short version: your bank doesn't pay much interest because they have no great higher yielding places to put your deposits to work.
The interest rate on savings accounts is pretty well synced up to inflation and the interest rates banks pay to the Fed.
Banks weren't giving 5% interest out of the goodness of their hearts. They were giving 5% interest because they could leverage that deposited money to make more than 5% elsewhere. Today, they can get essentially interest-free money straight from the Fed, so there's no point in paying much interest.
Honestly I'd much rather have had a high rate back then as it meant home prices were lower. Now that rates have plummeted that could be refinanced into what might be quite a decent amount of savings.
Hindsight is always 20/20, but it wasn't an obvious slam dunk to buy a home with an 18% loan. That's like paying for your house on a credit card. It was even more unaffordable then as it is now (on average, obviously individual markets vary--SF is more $$$ and Detroit way cheaper).
> Affordability dropped to an all-time low as rates climbed to record levels. Simply put, mortgage rates priced most Americans out of the market, and it took years for home sales to rebound.
What do you use to hold your emergency fund? I agree with you regarding the useless interest rate, but I can't think of a better way to have money immediately available in case of unexpected expense. Do you just use a checking account for that?
Credit cards are fine for it. The logistics of getting money out of a savings account is slightly more annoying than a card if you are in an emergency.
Checking accounts, but you need a lot less in your "emergency fund" than you think you do. You don't need 6 months of salary in your emergency fund. In a true emergency, you can always get money from an index fund with at most a few days' notice (one business day). If you need more money than your checking account in less than a few days notice, and you know you can easily cover it by selling shares from an index fund, then charge it to a credit card. That doesn't mean you should ever carry a balance or pay interest; it just means you rely on the fixed period of time between charging something and paying the bill to give you time to sell stock.
Sure. But consider the relative risk of having a large-scale emergency requiring you to sell a large amount from an index fund in a hurry, versus the much more definite loss of return of having large quantities of money in a savings account rather than invested. (Also consider what other mechanisms you have covering such emergencies, such as various forms of insurance, disability coverage through your employer, etc.)
The inflation rate is 1.1% for the past 12 months - its not ideal but IMO its not that terrible relative to the risk of a market downturn blowing up your money. Maybe its a generational thing - I watched the .com bust and then 2007. Stocks are at their highest point ever right now - I'm not so sure it'll beat the mattress.
I went through both of those busts, and had (a small amount) of stock during the first one. That's when I learned never to buy individual stocks, to do dollar-cost averaging (with a fixed amount every paycheck), and to not pay attention to short-term returns.
Another way to look at those two busts: "hey, the market's on sale right now, the fixed amount I put in buys more shares right now".
A credit card. I have generally 30 days to convert non-liquid assets into cash to pay it off with no interest payment. This is the whole point of credit cards in my opinion.
I don't subscribe to the advice that I need 3 to 6 months of cash sitting in a 0.00% savings account "just in case." I'm not sure why I would need that much money for anything.
I can get several thousands of dollars from my brokerage to my checking account in a matter of days. Most other emergencies allow me to arrange payments. I don't know why this is such a bad idea, it has worked great for me so far.
Its strange how banks reward checking accounts but not savings accounts. I get no reward or benefit from my savings account. Due to holding the balance in my checking, I get all my ATM fees auto reimbursed. Its not much but its worth more than keeping it in zero interest savings.
There's also a time issue. I have plenty of credit so for less than a week I can use my CC and for more than a week or having to sell stock wait for the transaction to clear and transfer from my brokerage to my bank.
I have gotten into time crunches like when my old car died and I wanted $10K or so for the downpayment on the new car and I needed a cashiers check like that weekend, but in the end everything worked out alright.
Many years ago I used to participate in Treasury Direct back when the interest rates made that worthwhile. Treasury Direct is (was?) a US treasury program where they'd direct debit and direct deposit t-bills, bonds, etc. Kinda cool back when the interest rate made it worthwhile. I remember some years after I stopped using it they did very early 2FA and I still have a card covered with random numbers laying around somewhere. TBills were sold at a discount for various terms so magically $99XX would disappear from my account and then a month or quarter or whatever later $10000 would direct deposit reappear. Its not worth the effort anymore of course. Maybe if I had $1M.
I'm not sure why I'd need to save money anyway. Lets say I saved $10K and got $500K of medical bills or $500K of some kind of legal judgment against me, the only effect of having had $10K in the bank is that I wouldn't have enjoyed having it. Its not like the hospital or IRS would walk away satisfied with $490K unpaid.
Fidelity brokerage account, with very tight stops on any equities that are held in that account (to avoid a pinch should the market poop itself). It's not instantly liquid, as you'll have to wait three days after you sell equities. But my account is a margin account, so I can have nearly instant access to cash (at 7%-ish, IIRC) if I don't use the margin balance for trading (which I generally don't). IOW, I can extract cash from the account via wire transfer, check (if I can ever find the checkbook for that account), or debit card and because I'm using margin balance the equities don't need to get sold.
The caveat is that using the margin balance is for a short-term need, like maybe go buy a used car and pay the account back using other funds later. I would not recommend using the margin balance for, say, living expenses after loss of a job. For that you sell the equities.
Methodology: This GOBankingRates.com survey posed the question, “How much money do you have saved in your savings account?” to 7,052 people among all 50 states and Washington, DC. Responses were collected through a Google Consumer Survey conducted from Aug. 1, 2016, to Aug. 9, 2016, and responses are representative of the U.S. online population. The survey has a 2.6 percent margin of error.
Yeah I totally think that's ambiguous, and people are likely to answer that under the definition of savings account as "my low-interest bank account that isn't my checking account" but the authors of the study actually meant "any account you use for saving money besides your checking account, including retirement".
If they asked me how much money I had in savings, I would guess they are referring to money I have either in a savings account, or with an investment firm or somehow saved for my retirement. And not specifically in a savings account.
The results are not really too dissimilar from the Fed study sited by The Atlantic earlier this year. In my not so humble opinion the question asked as part of the Fed study is more robust but the conclusion is similar.
http://www.theatlantic.com/magazine/archive/2016/05/my-secre...
My bank insists on calling its high yield savings account a checking account. In the past banks tended to value savings accounts because the Fed requires less reserve on these. Nowadays reserves are more than abundant. Investors tend to value checking account deposits more because they think transaction accounts are more stable over time. So it is a naming game.
Fellow millennial here. I'd recommend investing in stock indexes. Your money, on average, will grow at a faster rate than inflation. If you leave your money in a checking or savings account, you will lose money to inflation.
If you're interested, I'd check out:
- The Mr. Money Mustache blog (my personal favorite)
There are also a lot of other blogs if you're not into his philosophy or writing style.
Edit: Just for clarity, I know that you said you invest in stocks currently, but I was mostly speaking to, "I cant find anywhere else I would put the bulk than a savings account." I don't have a savings account, and I treat my investments like savings. You shouldn't need a lot of money in your current savings account, but you should have a lot in investments. If you feel the need to have a lot in your savings account, I'm guessing it means you take money out of it often, in which case it might as well be in a checking account. Just my $0.02.
To start off, I used Vanguard and did it all myself, which is a great option (many would say the best). I've since switched to Wealthfront, which is also pretty cool, although some people believe their slightly-higher fees don't buy you anything[1]. I personally disagree!
The general consensus from what I've read on investing is that it's impossible to beat the market consistently, so "professionals" are no more skilled than someone picking out random investment decisions from a hat :) On average, the market as a whole grows, so there's no real reason to try to risk beating it.
The MMM blog covers all of this in great detail, but if you're interested in chatting more about this stuff (or if you want a referral to Wealthfront for reduced fees!), hit me up. My email is [myusername]@gmail.
> The general consensus from what I've read on investing is that it's impossible to beat the market consistently
The slight addendum to this is that advisors can help with risk tolerance, tax efficiency, and explaining concepts, but as you mentioned Robo-advisors like WealthFront arguably do a good enough jobs at these topics to bridge the gap.
> To start off, I used Vanguard and did it all myself, which is a great option (many would say the best). I've since switched to Wealthfront, which is also pretty cool, although some people believe their slightly-higher fees don't buy you anything[1]. I personally disagree!
Interesting! I switched from Betterment TO Vanguard once I didn't need the guidance they provide (and corresponding higher asset management charges) anymore (target date funds in retirement accounts, life strategy funds in taxable accounts for extreme early retirement Mr Money Mustache style).
> I'm holding some long term positions in stocks, but honestly, I cant find anywhere else I would put the bulk than a savings account.
Unless you have a reason to be risk averse, then continuing what you're doing is probably best (e.g. ETFs/mutual funds/stocks/bonds). Buying into the market is a great passive way to grow your wealth.
If you're looking for near-zero risk, there's really nowhere you can invest that's much above 0%. The good news is that inflation is also near 0%. (Although that's not much consolation is you're trying to save up for housing in areas where that's appreciating rapidly.)
Saving has always been about taking a portfolio approach. Risk free investments have never had a great return relative to inflation. (Because basically they can't.)
Uhm - how is inflation at 0%? Core inflation (which ignores health, energy, food prices) may be low, but real inflation over the past 10 years has been very high - I'd say probably close to 50% total.
> Core inflation (which ignores health, energy, food prices) may be low, but real inflation over the past 10 years has been very high - I'd say probably close to 50% total.
And you'd be wrong.
Inflation as measured by the CPI-U-RS (not the "core" version, which excludes food and energy -- not "food, health, and energy" as you stated), looking at end of year indexes to get annual inflation over the Dec. 2005- Dec. 2015 period had a high of 4% per year in 2007 and a low of 0.06% in 2008, an average of 1.87% per year, and a total of 20.28% increase in price index over the 10 year period -- the average of that period is just over half the average annual rate of inflation (3.36%) of the Dec. 1977 to Dec. 2015 period, so its hardly been "very high" in the last 10 years.
And the last two years have been, while not as low as 2008, still not far from 0, with 0.76% in 2014 and 0.72% in 2015.
You'd have to provide numbers to convince me about food and energy costs (the latter of which have been historically quite variable in any case). A quick look at food pricing says that restaurant pricing has gone up faster than raw goods pricing.
Yes, health case has certainly increased by significantly more than the CPI. As has housing in some areas (but not in others).
In any case, a 2% annual increase of prices still amounts to something like 22% over 10 years. But 2% is still pretty close to zero inflation relative to many historical periods.
The traditional advice for long-term (7+ year) savings is a mix of low-cost index funds and bonds.
Other options include real estate (either by directly buying property or via a REIT), "accredited investors" could angel-invest in startups, and some people really like owning gold/precious metals.
I've done well with bitcoins. If you look at just about any 1 year or 2 year or 3 year period, bitcoin has had great returns. There were only 2-3 spikes you could have bought during to lose money on a long position.
EDIT: I invest in this in addition to my 401k which is 25% stocks and 75% a guaranteed return fund. I wouldn't recommend bitcoin exclusively.
Max out your 401k and Roth IRA. You won't be able to retire by saving cash unless you have an extremely high savings rate relative to your income -- and even then, inflation will erode the purchasing power of your cash.
Don't buy whole life insurance. It's a pretty bad idea.
Yep. I have no doubt that savings--wherever they're held--are arguably lower than they "should" be (for all sorts of reasons) but this site does seem to be actively pushing people toward actual traditional savings accounts.
Taken literally, I fall in this 69%, because my emergency funds are in my checking account. I'd guess that most people keep their money spread across different kinds of accounts, assets, and investments.
If we don't take this literally, then perhaps the concern is that most people have no savings anywhere, and live paycheck to paycheck.
They really need to say in the article what they mean by savings, because otherwise it is useless. And if it means literal saving accounts, then who cares.
They do say. It's in the first sentence, in big letters at the top of the first chart, and repeated several times after.
Edit: to make this more productive than just a "read the article!" comment, they are specifically talking about savings accounts, not any other kind of savings.
Well, the question was literally "How much money do you have saved in your savings account?" Regardless of what they think it means, I'm pretty sure the vast majority of people will interpret "savings account" as actual savings accounts.
In the Methodology section of the survey page, it says:
> The survey posed the question, “How much money do you have saved in your savings account?” and provided the following as possible answers: $0, “just the minimum balance requirement,” less than $1,000, $1,000-$4,999, $5,000-$9,999, $10,000 or more, and “I don’t have a savings account.”
Based on the wording of the question and answers, I'm guessing many people would have taken the question literally and answered the same way you did.
My answer would be the same. Even though I have plenty of money in my checking accounts, I have almost nothing in the "savings" account. I've never heard a good reason to move money from the former to the latter.
In the past you could get savings accounts paying significant interest...nowadays it doesn't matter so much. In 2006 I had an ING Direct account paying something like 4.5%.
Shameless plug, but this is why my company, Survata, reviews every single survey that goes out through us, to catch biases written into questions. They can seriously skew results. That said, even though I imagine there was some level of confusion about savings v. checking, my guess is that the overall conclusion wouldn't change substantially if you guaranteed the respondents all understood the question identically. The news that Americans don't have nearly enough savings isn't exactly new, and as others have pointed out, there are plenty of situations where living paycheck to paycheck is the only realistic option.
I can attest to this, I used Survata several years ago and I was very pleased with the service, very high quality results.
I'm glad to read you're still around and still maintaining that high quality of service. I look forward to being able to use your service in the future :)
Ah there it is. So I think it's safe to say that this article is indeed useless. It would be great to see a real survey of this nature, but asking about only savings accounts is a pretty lame.
I would like to see what % of the stock market is held by individuals. 0 in savings but 100K in the stock market..if you get an average Div Yield of 2% (not difficult if you add AT&T, PCG, GE, DUK etc etc to your holdings) you would get a much better return, not even counting the price increase. Also how many people have 0 in savings but 100K+ in 401K/IRA accounts. Nobody saves in a cash account for retirement right? why would you, you get no tax break
I don't like how the article isn't exactly clear on whether the people with less than $1,000 in their savings aren't simply using their checking accounts to store their cash. I've seen similar articles about a large percentage of Americans being unable to come up with $x amount of money on short notice for an emergency. I think that wording is more specific -- it implies that they don't have the money in any sort of liquid form, whether that be bank accounts, physical assets, or even cryptocurrencies.
I view savings accounts as a staging area for other kinds of investment (house, stocks, etc). It's not meant to be the primary storage, but absolutely can count towards retirement.
Just to counterbalance some anecdotes, I-- as well as many friends; have literally no savings and very little in the way of assets. Given trends towards renting, part-time pay, lack of employee benefits and on-demand services; many Americans have little in the way of assets
Do you think it is because you collectively have chosen lives that encourage higher spending than average (median annual spending of single people is about 32k/year) or because you have been unable to find consistent work that pays $15/hour?
I don't even have a savings account, but I've got $50k just lying around in a dozen checking accounts. The article is written to conclude that I'm in dire straits.
There seems to be a real disconnect between some HN readers and most Americans, who have a median household income of $54k. Half of Americans live on less. A lot of them live paycheck to paycheck (if they're fortunate enough to have a job at all) and many have huge debts on top.
There seems to be a real disconnect between some HN readers and most Chinese, who have a median income of $10k. Half of the Chinese live on less. Most of them don't live paycheck to paycheck and many don't have huge debts on top.
Instead, the Chinese are financially responsible and save between 25% and 50% of their income. They accomplish this by reducing their consumption.
Everyone, every entity, loaded up on credit. It's really astounding. You go overseas and realize it's not normal. It's very distorting to the economy as well as so many organizations can stay in business with credit
Very true... other than a house, before the 1950's most people didn't buy much of anything on credit if it could be avoided. Unfortunately, credit/loans distort pricing/value and drive prices up until it becomes difficult without credit.
The sad thing to me the past few years has been food pricing... it just seems to be several times what it was even a decade ago, and very little reason behind it from a production standpoint. It feels like I don't really save any money when I cook, though the food is usually better, and I do get more portions (portion control is actually harder though).
1. the article you linked says they have an average income of 10k, not median.
2. they have significantly lower cost of living
3. fta:
>in both China and the U.S., the average family’s assets were about eight times its average income.
4. seems this was a study of 2000 urban chinese, not all chinese. a sample of 2000 urbanites probably doesnt scale to over a billion people....
5. china has undergone several decades of large economic growth. if you compared china today with theUS in the late 1950s theyd probably seem pretty similar...
6. only 12% of chinese (from the 2000 person sample) owned a car
1) In higher inequality countries (which includes China) the median is usually lower than the average. So that only makes my point stronger.
2) The numbers provided are adjusted for PPP.
4) Whether urban or overall, it illustrates that far poorer people than Americans are able to save money. The savings rates across the country don't differ significantly. India also has a very high savings rate.
5) Yes, and it's still poor by US standards. So was 1950's USA. If 1950's Americans could save (did they), why can't vastly richer 2016 Americans?
6) As I noted, Chinese people save money by reducing consumption.
Imagine how horrible it would be to spend an hour commuting in the dollar vans with all those Chinese immigrants! See also Scott Sumner's article on this: http://www.themoneyillusion.com/?p=31723
The fact is that Chinese people earn low wages and still save money in the United States.
[edit: removed the last sentence, apparently I misread.]
Adjusted for inflation median household income in the US has grown by about 20% since 1950. Given massive increases in inequality since then the lower percentiles have seen close to zero growth since then. But TVs have gotten bigger, which is nice.
It's actually still overstated; for example, there is no hedonic adjustment to health care in CPI. In 1950, I'd be a cripple. In 2014 I had surgery and now I'm in great shape. Since surgery costs more than a doctor saying "you're fucked", the BLS treated it as inflation.
And really, this claim just doesn't pass the smell test. And by "smell", I mean the smell of an outhouse. In 1950 the bottom 16-32% (depending on which set of numbers you look at) lacked full indoor plumbing.
Statistics bureau in my country does not publish median income, but I have a good guess on what it looks like based on averages and quantiles. I would consider 40% of that a good deal on rent in urban area. Add communal bills on top of that and you easily get at least 50% of median household income spent on having a roof above you alone. Add food, clothing, an occasional treat for a child and it gets pretty difficult to survive till next paycheck without constantly thinking about reducing price of everyday meal.
I would guess that most HN readers are (and it would be strange if they did not, actually) disconnected from a below average/median person to a level that they only exist in some urban legends of a student living in a cupboard under some granny's stairs and having ramen on holidays. That's a bit superfluous, but median income in urban areas is not something easy to make a living of. Your mileage may vary.
I frequently, as a married dude, get reminded of the following very important point:
Just because I feel like something should be a particular way doesn't mean it is.
Put another way:
Just because you disagree with something personally, does not give you the right, as a well educated, smart, rich person, to look at it for 15 seconds and throw it out as garbage.
Every one of us does this all the goddamn time and its intellectually dishonest at best.
I know that many of us make reasonably good money. I know that most of us are friends with people of a similar education and income level.
This doesn't mean that the reason 69% of Americans have no savings is because they are sagely putting their money in the market or some other better structured investment vehicle.
We need a national income that is indexed to general economic productivity, then households that make 54k in total will all have at least 10k in savings on average, if that 54k is on top of a national income based on a fair calculation of general economic productivity.
For every group of Americans making $40k, there's a bunch making $30k. So there's no reason why some family making $40k can't save $5k every year.
What's more, there's an entire group of people in this country that give up 10% of their income to their church. They're called Mormons. If they can get along, then so can everybody else, saving 10% of income per year.
69% Americans include children, elderly, housewives, daily wage people etc. who do not maintain an active bank account. The best would be to check this number household and consider all savings instead of merely savings bank account.
Given that the best savings / MMA accounts are netting at most 1.10%, and inflation has swung between ~1% and 3% over the past 10 years, you're likely losing money with a savings account.
Better to dump it in a major index fund or bonds if you're feeling cautious.
Most people with substantial incomes realize this and do this anyway. I wonder if investment portfolios were included when they asked about "savings" accounts?
I don't know about the USA, but in Europe "ordinary" people don't do investment portfolios. You can safely assume that if they don't have any savings, they most certainly won't have investment portfolios.
I find that hard to believe. Europeans don't have retirement investments? Even if it's just a pension they have some sort of portfolio even if it's not managed by the individual.
I don't know about Europe, but here in Uruguay and South America in general you have absolutely no say about what they do with your pension money.
There are even laws mandating the pension funds to invest in local Treasury bonds (which are fortunately reasonably safe and high-yield, Uruguay is among the most stable in the continent)
In Latin America in general pension funds are mismanaged and periodically raided by populist governments.
Pensions are managed by pension funds. Can't touch 'm until you're 67 (in the Netherlands). And even then you won't receive a lump sum, but a monthly allowance (that's how I see it). All employees take part in a pension fund, as mandated by law. It's one very important reason why I'm self employed. It's the only way to avoid this nonsense.
The big difference is if you have a substantial income you can afford to play the long game and throw money into the market. If you're living paycheck to paycheck as very few people who contribute content to this site do, it's a much different story. They need the money to be liquid, and they can't afford to take a 10% loss and wait for a rebound.
Got a letter from the SSA the other day. Said quite clearly with no ambiguity that Social Security should not be considered to provide more than 40% of your retirement income. Savings are necessary if you want to live out your old age at a standard above "almost poverty."
Even in countries with robust social security programs, I imagine many would see value in having more money than the baseline government benefits provide.
Holding wealth in the dollar means holding wealth in a depreciating asset. Gold, silver, bitcoin, real estate, etc much preferred.
But given that my income and expenses are head up (at the moment), I'm in the same boat ... 7k net in and 7k out, a lot of which is me re-buying my own CC debt with loans from lending club, etc.
Bitcoin is by definition depreciating. Precious metals have very little utility and are only used as stores of value. They can not generate dividends and are therefore likely to under perform in the very long term: http://www.businessinsider.com/buffett-on-gold-2012-2
Real estate can be a decent way to store money long term because of the rent you can collect. Because many people are highly leveraged with real estate, selling before your mortgage is paid off can be very volatile.
Good real estate investment: Buying a rental property.
Bad real estate investment: Buying a bigger house than you need for yourself hoping it will go up in value.
I hate it that they equate "how much you have in your savings account" with "how good you are at saving money." Even if you ignore retirement savings, what about Checking accounts? What about Roth IRAs that can have all of the principal removed tax and penalty free? A person could be REALLY good at savings and just have chosen that their liquid cash stays in checking accounts and emergency funds stay in their Roth IRA.
> Low-Income Adults Struggle the Most With Saving Money
Is this really a significant enough conclusion to make a subheadline? It seems obvious to me that those who are living paycheck to paycheck (or close to it) would have trouble saving.
I have less than $1000 in my savings account because I still have a student loan that has an 11% interest rate. I work two jobs and pay upwards of $3000 a month towards my student loans.
I've had zero luck refinancing my student loans because I "don't have enough money in savings", despite being years ahead on my payments.
I've never actually gotten the point of having a savings account. I opened one with chase when they offered me $150 bonus and promptly closed it soon after. This survey to me seems useless.
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[ 3.5 ms ] story [ 259 ms ] threadLocal banks and credit unions are almost always better for you and your money..
So if you deposit $299 on 1 January, and are over 18, you end up with $239 on 31 December. Yay for that -20% interest rate. So make sure you deposit that extra $1 to hit $300. But if the daily-compounded interest is rounded to the nearest $0.01, you don't even get any interest unless you have a balance of $18250.91 or greater. In order to get the minimum possible $3.65 daily-compounded interest on a balance of $300, the APY has to be at least 1.2167%.
Just be honest and say the rate is 0%, man. It's no wonder all those Wells Fargo employees had to commit fraud to open more of those accounts. PT Barnum's maxim notwithstanding, there just aren't enough suckers in the world to open a new Way2Save account of their own volition.
My spouse recently suggested that we open savings accounts for the kids, so I pointed out the abysmally low effective interest rates on accounts . We're opening investment accounts for them instead. Kids, the way to save is to dump everything in index funds and forget it's there.
That said, despite the savings-account-specific question, I suspect the statistics would look quite similar if you made the question less account-type-specific and just asked how much money people had saved away.
If you do a lot of transactions from your checking account, and only occasionally transfer from savings to checking, then the former is more likely to be compromised than the latter.
This difference increases if you use your checking account online, at via third party pin entry devices, or even at your bank's ATMs while only accessing your savings account from a teller in your bank. All of the former methods of access can be compromised and you can lose the contents of your checking account -- which would be limited if you didn't keep all of your money in your checking account.
Unlike credit cards, bank accounts aren't protected against theft or fraud, so the risk of theft is a real possibility that could cost you.
I'd definitely recommend not doing any transactions from the same account that you keep most of your money in; have a layer of insulation. Don't use a debit card or a bank-account-backed "credit" card.
And if you own stocks and such, those are pretty liquid.
And we got a new house in the end!
(This is a question, not an answer, by the way. I have no idea.)
http://www.bloomberg.com/markets/rates-bonds/government-bond...
(.27% for 3 month treasuries, just .79% for 2 year)
Longer-term bonds are significantly higher risk than a savings account.
These conditions that led to a higher interest rate are probably also leading to a higher inflation rate. So my $1000 is locked up for 20 years in an instrument where it's decreasing in real value.
[1] https://www.fdic.gov/regulations/resources/rates/
But you wanted to know "What gives higher returns but near-zero risk?" and assuming by "risk" you meant "default risk" there you go....a high interest low denomination savings instrument backed by the federal government.
I don't deny that there are better investment vehicles than a savings account. I'm just asking whether there is something of similarly low risk with a better interest rate. Stocks are definitely not lower-risk.
See the chart below [0] - If you invested all your money in 1965, there is only a 8 year window at the end of the 90s where you would have averaged a 3% return per year. Much of the rest of the time you're looking at negative returns.
[0]: https://static01.nyt.com/packages/images/newsgraphics/2011/0...
A comment further up the thread asked for "very low risk"; the reply to that changed it to "near-zero risk".
Better to consider the type of risk you care about, and how much money you want associated with each type of risk. Checking accounts and index funds both make sense as part of an overall strategy. I don't know that savings accounts do, though, except perhaps as a purely organizational tool.
https://www.census.gov/people/wealth/files/Wealth%20Highligh...
(Direct link to spreadsheet here: http://www.census.gov/people/wealth/files/Wealth_Tables_2011...)
It's kind of difficult to fully read this 2011 survey since "percent holding" and "median value" is in two separate tabs, and it's hard to get a good sense of correlations. But the spreadsheet seems to show:
- Almost 70% of people owned a savings account, with a median value of $2,450 overall.
- 29% of people own a checking account, with a median value of $600
- 85% of people own a motor vehicle, with a median value of about $6,800
- 65% of people own a home, with a median equity value of $80,000
- 42% of people have a 401k, with a median value of $30,000
- 29% of people have an IRA account, with a median value of $32,000.
By far, it appears that housing is the most valuable asset many people own; at least, in every category, the median for housing is higher (sometimes up to 6 times higher) than the median for a 401K account. Also, it seems that a far more percentage of people have houses compared to 401Ks, the next largest category with >$10K median assets.
Now, is it a bad sign? The only things I can say:
A) Houses are hardly a "liquid asset".
B) Home ownership for many reasons is declining (http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-...).
The later point makes me wondering if future generations' preparation for retirement may be impacted. The former is not a bad thing if you do have liquid assets for emergencies etc, but I can imagine there is a significant percentage which do not. (A 401K really isn't a great "liquid asset" for instance, and some probably don't have much of that.)
I cant reconcile how that large of a discrepancy is possible. Surely some people inherited houses or cars, or paid literal cash, but it cant be that many.
edit: This FDIC report [0] from earlier this month suggests only 7% of households are "unbanked", meaning they dont have access to a bank account (doesn't specify what type). That number makes way more sense.
[0] https://fdic.gov/news/news/speeches/spsep0816.html
In practice, savings accounts are never likely to significantly outpace inflation.
Nowadays with e-trade and the like, it's as easy to use much more sophisticated investment mechanisms than back then.
http://www.cnbc.com/2016/06/29/there-are-now-117-trillion-do...
Banks weren't giving 5% interest out of the goodness of their hearts. They were giving 5% interest because they could leverage that deposited money to make more than 5% elsewhere. Today, they can get essentially interest-free money straight from the Fed, so there's no point in paying much interest.
http://finance.yahoo.com/blogs/just-explain-it/why-mortgage-...
> Affordability dropped to an all-time low as rates climbed to record levels. Simply put, mortgage rates priced most Americans out of the market, and it took years for home sales to rebound.
Another way to look at those two busts: "hey, the market's on sale right now, the fixed amount I put in buys more shares right now".
I don't subscribe to the advice that I need 3 to 6 months of cash sitting in a 0.00% savings account "just in case." I'm not sure why I would need that much money for anything.
I can get several thousands of dollars from my brokerage to my checking account in a matter of days. Most other emergencies allow me to arrange payments. I don't know why this is such a bad idea, it has worked great for me so far.
Its strange how banks reward checking accounts but not savings accounts. I get no reward or benefit from my savings account. Due to holding the balance in my checking, I get all my ATM fees auto reimbursed. Its not much but its worth more than keeping it in zero interest savings.
There's also a time issue. I have plenty of credit so for less than a week I can use my CC and for more than a week or having to sell stock wait for the transaction to clear and transfer from my brokerage to my bank.
I have gotten into time crunches like when my old car died and I wanted $10K or so for the downpayment on the new car and I needed a cashiers check like that weekend, but in the end everything worked out alright.
Many years ago I used to participate in Treasury Direct back when the interest rates made that worthwhile. Treasury Direct is (was?) a US treasury program where they'd direct debit and direct deposit t-bills, bonds, etc. Kinda cool back when the interest rate made it worthwhile. I remember some years after I stopped using it they did very early 2FA and I still have a card covered with random numbers laying around somewhere. TBills were sold at a discount for various terms so magically $99XX would disappear from my account and then a month or quarter or whatever later $10000 would direct deposit reappear. Its not worth the effort anymore of course. Maybe if I had $1M.
I'm not sure why I'd need to save money anyway. Lets say I saved $10K and got $500K of medical bills or $500K of some kind of legal judgment against me, the only effect of having had $10K in the bank is that I wouldn't have enjoyed having it. Its not like the hospital or IRS would walk away satisfied with $490K unpaid.
Fidelity brokerage account, with very tight stops on any equities that are held in that account (to avoid a pinch should the market poop itself). It's not instantly liquid, as you'll have to wait three days after you sell equities. But my account is a margin account, so I can have nearly instant access to cash (at 7%-ish, IIRC) if I don't use the margin balance for trading (which I generally don't). IOW, I can extract cash from the account via wire transfer, check (if I can ever find the checkbook for that account), or debit card and because I'm using margin balance the equities don't need to get sold.
The caveat is that using the margin balance is for a short-term need, like maybe go buy a used car and pay the account back using other funds later. I would not recommend using the margin balance for, say, living expenses after loss of a job. For that you sell the equities.
See https://www.gobankingrates.com/personal-finance/how-save-mil...
Methodology: This GOBankingRates.com survey posed the question, “How much money do you have saved in your savings account?” to 7,052 people among all 50 states and Washington, DC. Responses were collected through a Google Consumer Survey conducted from Aug. 1, 2016, to Aug. 9, 2016, and responses are representative of the U.S. online population. The survey has a 2.6 percent margin of error.
As a millennial who will not be retiring (period) unless severely injured, where else would I put my savings? My checking account rate is 0%.
Whole Term life insurance only can be "cashed in" after building 20+ years.
I'm holding some long term positions in stocks (risk), but honestly, I cant find anywhere else I would put the bulk than a savings account.
If you're interested, I'd check out:
- The Mr. Money Mustache blog (my personal favorite)
- r/personalfinance
- patio11 also wrote an article on investing recently: https://training.kalzumeus.com/newsletters/archive/investing...
A relevant MMM blog post (there are plenty others): http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-...
There are also a lot of other blogs if you're not into his philosophy or writing style.
Edit: Just for clarity, I know that you said you invest in stocks currently, but I was mostly speaking to, "I cant find anywhere else I would put the bulk than a savings account." I don't have a savings account, and I treat my investments like savings. You shouldn't need a lot of money in your current savings account, but you should have a lot in investments. If you feel the need to have a lot in your savings account, I'm guessing it means you take money out of it often, in which case it might as well be in a checking account. Just my $0.02.
Do you self-invest, or hire a professional, or mixed?
Currently I'm managing my own stocks. My employer, my IRA and other monies I'll never get to see.
The general consensus from what I've read on investing is that it's impossible to beat the market consistently, so "professionals" are no more skilled than someone picking out random investment decisions from a hat :) On average, the market as a whole grows, so there's no real reason to try to risk beating it.
The MMM blog covers all of this in great detail, but if you're interested in chatting more about this stuff (or if you want a referral to Wealthfront for reduced fees!), hit me up. My email is [myusername]@gmail.
[1] https://medium.com/@blakeross/wealthfront-silicon-valley-tec...
The slight addendum to this is that advisors can help with risk tolerance, tax efficiency, and explaining concepts, but as you mentioned Robo-advisors like WealthFront arguably do a good enough jobs at these topics to bridge the gap.
Interesting! I switched from Betterment TO Vanguard once I didn't need the guidance they provide (and corresponding higher asset management charges) anymore (target date funds in retirement accounts, life strategy funds in taxable accounts for extreme early retirement Mr Money Mustache style).
I will reach out if I choose WF, I'll do some research between the two.
Unless you have a reason to be risk averse, then continuing what you're doing is probably best (e.g. ETFs/mutual funds/stocks/bonds). Buying into the market is a great passive way to grow your wealth.
Saving has always been about taking a portfolio approach. Risk free investments have never had a great return relative to inflation. (Because basically they can't.)
And you'd be wrong.
Inflation as measured by the CPI-U-RS (not the "core" version, which excludes food and energy -- not "food, health, and energy" as you stated), looking at end of year indexes to get annual inflation over the Dec. 2005- Dec. 2015 period had a high of 4% per year in 2007 and a low of 0.06% in 2008, an average of 1.87% per year, and a total of 20.28% increase in price index over the 10 year period -- the average of that period is just over half the average annual rate of inflation (3.36%) of the Dec. 1977 to Dec. 2015 period, so its hardly been "very high" in the last 10 years.
And the last two years have been, while not as low as 2008, still not far from 0, with 0.76% in 2014 and 0.72% in 2015.
(Source: http://www.bls.gov/cpi/cpiursai1977-2015.xlsx + math.)
Yes, health case has certainly increased by significantly more than the CPI. As has housing in some areas (but not in others).
In any case, a 2% annual increase of prices still amounts to something like 22% over 10 years. But 2% is still pretty close to zero inflation relative to many historical periods.
Other options include real estate (either by directly buying property or via a REIT), "accredited investors" could angel-invest in startups, and some people really like owning gold/precious metals.
Unfortunately I don't have enough capital for real estate, but I've gotten some great replies to my (parent) on going for index funds.
EDIT: I invest in this in addition to my 401k which is 25% stocks and 75% a guaranteed return fund. I wouldn't recommend bitcoin exclusively.
Don't buy whole life insurance. It's a pretty bad idea.
If we don't take this literally, then perhaps the concern is that most people have no savings anywhere, and live paycheck to paycheck.
Edit: to make this more productive than just a "read the article!" comment, they are specifically talking about savings accounts, not any other kind of savings.
See https://www.gobankingrates.com/personal-finance/how-save-mil...
> The survey posed the question, “How much money do you have saved in your savings account?” and provided the following as possible answers: $0, “just the minimum balance requirement,” less than $1,000, $1,000-$4,999, $5,000-$9,999, $10,000 or more, and “I don’t have a savings account.”
Based on the wording of the question and answers, I'm guessing many people would have taken the question literally and answered the same way you did.
My answer would be the same. Even though I have plenty of money in my checking accounts, I have almost nothing in the "savings" account. I've never heard a good reason to move money from the former to the latter.
I'm glad to read you're still around and still maintaining that high quality of service. I look forward to being able to use your service in the future :)
Instead, the Chinese are financially responsible and save between 25% and 50% of their income. They accomplish this by reducing their consumption.
http://www.forbes.com/sites/moneybuilder/2010/06/24/one-big-...
[edit: I misread, apparently it's urban Chinese. A little more googling gives similar numbers, so I stand by the point I'm making. https://www.bloomberg.com/news/articles/2016-03-09/here-s-wh... http://www.chinadaily.com.cn/china/2016-01/21/content_231834... ]
The sad thing to me the past few years has been food pricing... it just seems to be several times what it was even a decade ago, and very little reason behind it from a production standpoint. It feels like I don't really save any money when I cook, though the food is usually better, and I do get more portions (portion control is actually harder though).
2. they have significantly lower cost of living
3. fta:
>in both China and the U.S., the average family’s assets were about eight times its average income.
4. seems this was a study of 2000 urban chinese, not all chinese. a sample of 2000 urbanites probably doesnt scale to over a billion people....
5. china has undergone several decades of large economic growth. if you compared china today with theUS in the late 1950s theyd probably seem pretty similar...
6. only 12% of chinese (from the 2000 person sample) owned a car
2) The numbers provided are adjusted for PPP.
4) Whether urban or overall, it illustrates that far poorer people than Americans are able to save money. The savings rates across the country don't differ significantly. India also has a very high savings rate.
5) Yes, and it's still poor by US standards. So was 1950's USA. If 1950's Americans could save (did they), why can't vastly richer 2016 Americans?
6) As I noted, Chinese people save money by reducing consumption.
The fact is that Chinese people earn low wages and still save money in the United States.
[edit: removed the last sentence, apparently I misread.]
https://en.wikipedia.org/wiki/Boskin_Commission
It's actually still overstated; for example, there is no hedonic adjustment to health care in CPI. In 1950, I'd be a cripple. In 2014 I had surgery and now I'm in great shape. Since surgery costs more than a doctor saying "you're fucked", the BLS treated it as inflation.
And really, this claim just doesn't pass the smell test. And by "smell", I mean the smell of an outhouse. In 1950 the bottom 16-32% (depending on which set of numbers you look at) lacked full indoor plumbing.
https://books.google.com/books?id=_nY9LFtlqygC&pg=PA180&lpg=...
http://www.advisorperspectives.com/dshort/updates/2015/09/23...
I'm obviously not making an argument that technology hasn't advanced since the 1950s. Don't be silly.
Just because I feel like something should be a particular way doesn't mean it is.
Put another way:
Just because you disagree with something personally, does not give you the right, as a well educated, smart, rich person, to look at it for 15 seconds and throw it out as garbage.
Every one of us does this all the goddamn time and its intellectually dishonest at best.
I know that many of us make reasonably good money. I know that most of us are friends with people of a similar education and income level.
This doesn't mean that the reason 69% of Americans have no savings is because they are sagely putting their money in the market or some other better structured investment vehicle.
The vast majority of those people are broke.
What's more, there's an entire group of people in this country that give up 10% of their income to their church. They're called Mormons. If they can get along, then so can everybody else, saving 10% of income per year.
The reason they don't is because they choose to.
Better to dump it in a major index fund or bonds if you're feeling cautious.
Most people with substantial incomes realize this and do this anyway. I wonder if investment portfolios were included when they asked about "savings" accounts?
There are even laws mandating the pension funds to invest in local Treasury bonds (which are fortunately reasonably safe and high-yield, Uruguay is among the most stable in the continent)
In Latin America in general pension funds are mismanaged and periodically raided by populist governments.
https://news.ycombinator.com/item?id=10353954
(the "past" option doesn't find it because these are new numbers)
A relevant link at the time:
47% of Americans say they lack the cash to pay a surprise $400 bill
http://www.politifact.com/punditfact/statements/2015/jun/09/....
With interest rates being what they are keeping liquid cash in a checking account seems optimal
But you have a good point, especially because the survey asked specifically about savings accounts: https://news.ycombinator.com/item?id=12549863
But given that my income and expenses are head up (at the moment), I'm in the same boat ... 7k net in and 7k out, a lot of which is me re-buying my own CC debt with loans from lending club, etc.
Real estate can be a decent way to store money long term because of the rent you can collect. Because many people are highly leveraged with real estate, selling before your mortgage is paid off can be very volatile.
Is this really a significant enough conclusion to make a subheadline? It seems obvious to me that those who are living paycheck to paycheck (or close to it) would have trouble saving.
I've had zero luck refinancing my student loans because I "don't have enough money in savings", despite being years ahead on my payments.