How much money do you have right now in your savings account? If you’re anything like the average American, it may not be much at all. A 2017 GoBankingRates.com survey found 58 percent of Americans have less than $1,000 set aside in savings. 39 percent have nothing saved.
“The state of our finances can weigh heavily on us,” says empowered money coach and Blissful Budget founder Rachel Peavy. “It gets tied to our idea of how well we believe we can provide for ourselves and our families. When we feel there isn’t enough, we have the sense our survival is being threatened.”
Practicing healthy money habits can translate to a positive outlook, and allows for more opportunities to take calculated risks in life. “I love seeing my clients build their cushion of savings,” she says. “That growing safety net often translates to a deep sense of accomplishment – and the confidence to take risks, like making a rewarding career change.”
A recent study validates some of the mental health benefits of saving money. According to the research, when it comes to overall life satisfaction, our “liquid wealth” (i.e., the balance in our checking and savings accounts) better predicts well-being than the tally of our raw earnings or investments.
“Many individuals believe increasing income or total wealth will improve their happiness,” the study claims. “[But] they may also benefit by building a financial buffer in their checking and savings accounts. We found this buffer to be associated with improved well-being regardless of how much a person earns, invests, or owes.”
Given the correlation between a consistently higher amount of savings and greater overall satisfaction in life, why do so many Americans have so little savings?
Ready to start healthy money habits? Read on to learn how you can make your accounts work harder for you.