Two-thirds of Americans are falling behind on their savings goals as living costs continue to rise, with nearly half believing they’ll never catch up financially.
At a Glance
- 67% of Americans feel behind on their savings goals, with 47% believing they will never catch up
- 63% of Americans with savings have withdrawn funds in 2025, with one in five doing so five or more times
- The average American saves about $496 monthly, but 30% save $200 or less
- Generation differences are significant: Gen X reports decreased savings while Gen Z shows increases
The Savings Crisis Affecting Most Americans
A recent survey reveals a troubling financial reality for many Americans: two-thirds (67%) feel they’re behind on their savings goals. More concerning, nearly half (47%) believe they will never catch up. This widespread savings shortfall crosses generational lines but affects older Americans particularly hard. The survey, commissioned by the consumer banking app Current for National Financial Literacy Month, gathered responses from 2,000 Americans evenly split across generations between March 28 and April 2, 2025.
“Americans are demonstrating incredible resilience and commitment to saving, even in challenging times,” says Erin Bruehl, consumer financial expert at Current.
The data shows many Americans are not just struggling to save but actively depleting existing savings. Approximately 63% of those with savings have withdrawn funds in 2025, with nearly one in five doing so five or more times. Emergency situations, everyday purchases, and housing costs represent the main reasons people tap into their reserves. Perhaps most telling, one-quarter of respondents report having less money saved now than at the beginning of 2025.
Generational Differences in Savings Habits
The financial picture looks markedly different across age groups. Generation X (ages 45-54) most frequently reports decreased savings, while Generation Z (ages 18-27) is most likely to report increases in their savings accounts. This generational divide extends to banking relationships as well. About 71% of Gen Z respondents find their current bank helpful in reaching savings goals, significantly higher than older generations report.
According to the 2024 Schwab Modern Wealth Survey, only 36% of Americans have a written financial plan.
This number is staggering considering the potential for positive outcomes associated with having a plan in place and regularly reviewing it.
Check out my concrete timing to… pic.twitter.com/0xAQjonzWJ
— Gabriel Gallante (@RocklineWealth) February 19, 2025
Younger Americans also demonstrate more flexibility in their banking relationships. The survey found that 52% of Gen Z believe they could get better service from another financial institution, and 45% are willing to switch banks. This contrasts with older generations who tend to maintain longer-standing banking relationships despite potentially missing better savings opportunities elsewhere.
Why Americans Are Dipping Into Savings
The reasons behind savings withdrawals reveal the financial pressures many Americans face daily. Unexpected expenses top the list, followed closely by everyday purchases that outstrip regular income. Housing costs, including rent and mortgage payments, represent another significant drain on savings. Only 18% report withdrawing money for something they were specifically saving for, indicating most withdrawals are reactive rather than planned.
“Over 60 percent of people have needed to use their savings this year, highlighting exactly why Americans are smart to try and build this financial cushion. Their savings are successfully serving their intended purpose — helping navigate both unexpected costs and ensuring they can maintain their essential needs,” explains Erin Bruehl.
Financial experts note that using savings isn’t necessarily negative if those funds are fulfilling their intended purpose. The challenge arises when withdrawals become so frequent that rebuilding savings becomes increasingly difficult, especially during periods of high inflation and rising costs.
Strategies for Improving Savings Outcomes
For Americans looking to improve their savings situation, financial experts recommend several practical approaches. Setting small, achievable goals rather than intimidating large targets can build momentum. Automating savings transfers removes the decision-making process that often leads to postponed savings. Identifying and reducing everyday expenses, even small ones, can free up surprising amounts for savings over time.
“Americans should select financial institutions that help them reach their goals. Online or mobile-only solutions often offer higher savings rates than traditional banks without monthly or minimum balance fees and provide additional benefits like early paycheck access and fee-free overdraft protection that provide additional cushion when bills are due. These benefits put more money in consumers’ pockets and can help people achieve their goals faster,” advises Bruehl.
The savings gap highlighted by this survey reveals a critical need for both improved financial education and more accessible financial tools. For adults over 40 concerned about retirement and other long-term savings goals, exploring alternative banking options with better interest rates and fewer fees could provide meaningful improvements to savings outcomes, even without significant changes to income.
