Money
& Saving

What They Mean in 2020

A RVC whitepaper/digital experience based on the “Money & Savings” RVC and Money.com Study

Illustrations by Edmon de Haro

INTRODUCTION

In good times and bad, most Americans are united in one economic goal: saving money. But how, and if, they save, as well as what they are saving for varies widely, no matter the financial climate. That’s because savers are people, with different hopes, dreams, aspirations and values. This new survey of more than 2,000 savers—a partnership between RVC and Money.com—started with the most basic questions: Are you saving money? What are you saving it for?

While 4 of 5 of those who responded describe themselves as savers rather than spenders, and most placed a high value on a sense of control over their finances, the study revealed fascinating differences among savers. Here are some of our key discoveries on money, savings and happiness.

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Budgeting for Life,
and the Unexpected

In many ways, a working household budget is a map to financial wellbeing, but it’s not something everyone has, or uses. Among the 65% of savers who have a personal or household budget, 79% say they always or usually stick to it.

To keep their budgets and savings on track, an impressive 88% of survey respondents set aside an emergency fund. But the protection those funds offer varies, and only a little more than half (53%) could pay for a year of general household expenses from their emergency funds. And 68% of all savers say that they have dipped into savings to cover unexpected bills, such as healthcare or car repairs. The good news is that we tend to get better at budgeting as we age. Retired savers are the most likely to stick to their household budgets and have a robust emergency fund

65%

have a household/
personal budget for savings and expenses

79%

always or usually stick to their budget

36%

of those earning $75k-$100k still worry about unexpected expenses

85%

of savers earning $50k-75k have set up an emergency fund

47%

say it’s enough to cover mortgage or rent

47%

of women are actively building emergency funds, versus 30% of men

I had health expenses that were denied by my insurance carrier. I needed to go on a payment plan with the provider and hospital, and an austerity budget for myself.”

–Woman, 61

Looking to the Future

One major reason people save money is to deal with life’s many uncertainties—91% of respondents say the ability to save gives them a sense of control over their finances. But that’s not always enough. Half of the people between the ages of 45 and 54 often feel that their finances control them. While nearly the same proportion of women and men are actively saving for the future, especially retirement (61% and 60%, respectively), women are nearly twice as likely as men (42% versus 22%) to worry they won’t have enough for retirement.

But retirement isn’t the end of the road. A full 89% of retirees describe themselves as savers, compared to 79% of those yet to retire—more than half are still saving for the future in general. Among their specific goals, 45% are saving for a vacation, and 34% for home improvements.

61%

of all consumers identify retirement as a top savings goal

52%

of retired consumers are still actively saving for the future

39%

of retirees are still saving for retirement

91%

of consumers say that saving gives them a sense of control over their finances.

50%

of those aged 45-54 feel that their finances often control them

42%

of women worry about not having enough to retire, vs. 22% of men

Declaring—and Defining—Financial Independence

One surprising discovery is that for many people, financial independence has more to do with peace of mind than it is a matter of spending capability. While just over half of all savers associate financial independence with the ability to buy whatever they want, 99% say it means having a feeling of control over their finances. More than 90% of savers say financial independence is connected with having a retirement plan. But there are challenges: 57% of savers between 45 and 54 are worried their savings won’t be enough to cover their retirement needs.

Control is also important, with three-quarters of happy savers reporting that they handle day-to-day decisions by themselves, or alongside a spouse or significant other, compared with just 25% who leave such decisions to their partner. And that sense of control varies along gender lines. While young savers say they are still working on independence, older ones are more likely to say they’ve achieved it.

99%

of savers say independence means the ability to pay all bills each month

10%

10% of men

92%

of all savers associate financial independence with having a retirement plan

26%

of women worry about paying their debts

57%

of those aged 45-54 worry they won’t have enough to retire

96%

of savers 65 or older have achieved the financial independence to splurge

77%

of women say they feel in control of their finances

88%

of those 35-44 years old

91%

of men

Financial independence means not relying on others for financial support (i.e., parents, grandparents, relatives, government) to meet day-to-day expenses.”

–Man, 32

Independence means not having to check with my husband before I purchase something, because I know I have my own money.”

Women, Men and How
They Look at Money

More than 80% of men are happy with their financial lives, compared with just 60% of women. But that dissatisfaction may drive better money habits. Women are more likely to seek ways to save, and to act on good deals when they see them. Women also tend to be more collaborative when making important financial decisions.

Generally speaking, men’s higher level of satisfaction translates to a lower level of concern about specific challenges. Only 39% of men worry about paying for their kids’ college, versus 51% of women. While 26% of women are concerned about paying off debt, only 10% of men feel that way. And women are nearly three times as likely (20% versus 7%) to worry about living paycheck to paycheck. Curiously, while 89% of men describe themselves more as savers than spenders (versus 76% of women), women are less likely to take money from their savings account for splurges, and more likely to associate financial independence with freedom from debt.

Independence means not having to check with my husband before I purchase something, because I know I have my own money.”

81%

Happier with their finances

10%

Less likely to worry about money

60%

17%

68%

More likely to work with spouse on big decisions

26%

More concerned about paying off debt

54%

10%

35%

of savers in a relationship have had a money fight with their spouse or significant other in the last month

66%

of savers aged 18-34 collaborate with a spouse or significant other on big financial decisions

87%

of savers involved with other savers are happy

51%

of retired savers say money stresses relationships

58%

among those earning less than $50k

21%

of those aged 55-64

63%

of spenders involved with other spenders

67%

of non-retired savers

That jumps to

Couples and Common
Financial Ground

One thing the study confirmed is that money can place real stress on relationships. More than three-quarters of all savers have fought over money with their spouse or significant other in the past six months, and more than one-third in the past month.

Some couples have the same attitudes toward money, but it can also be the case that one person is a saver and the other is a spender. Among couples, savers involved with other savers were the most likely to be happy (87%). Fortunately, they’re also the most common, according to the survey, representing 55% of all couples. At the other end of the spectrum, just 63% of spenders with a spender spouse (7% of all couples) describe themselves as happy.

When it comes to decision-making, individual autonomy on the small stuff, along with mutual consultation on major choices seems to be the approach that most happy couples share. The youngest savers, aged 18–34, are the most inclined to work with a spouse or significant other on key financial decisions. The stress that money places on a relationship also seems to be directly related to how much money a couple has. While 58% of the least affluent savers (with under $50k in income) have fought over money in the past month, just 31% of the most affluent savers (with incomes of $200k-plus) have done so.

35%

of savers in a relationship have had a money fight with their spouse or significant other in the last month

66%

of savers aged 18-34 collaborate with a spouse or significant other on big financial decisions

87%

of savers involved with other savers are happy

51%

of retired savers say money stresses relationships

That jumps to

58%

among those earning less than $50k

55%

aged 55-64

63%

of spenders involved with other spenders

67%

of non-retired savers

Financial independence means having enough savings and guaranteed income for my wife and I to sustain the lifestyle that we enjoy, without having to work.”

–Man, 60

I’m concerned that the value of my savings will decrease due to instability in markets and the economy.”

–Woman, 72

Confidence and a Sense of Control

The study revealed a clear connection between saving money and the confidence people feel about their financial destinies. More than 90% of all savers say saving money makes them feel responsible. But only 78% say they feel in control of their long-term savings.

Confidence is more than just a feeling—nearly half of women say their finances control what they can do. And it changes with age—just 49% of savers aged 18-34 feel in control of their long-term savings, compared with 82% of those aged 55-64. Confidence also equates to less worry about things beyond their control. Fewer than one-third of retired savers worry about the overall direction of the economy, versus 42% of those who are not retired. Among all income groups, less affluent savers report the lowest confidence in their financial picture, and are the likeliest to refer to themselves or their spouses as spenders rather than savers.

I’m concerned that the value of my savings will decrease due to instability in markets and the economy.”

–Woman, 72

54%

of those earning $200k and up are concerned about saving for college

94%

of all savers say saving money makes them feel responsible

82%

of savers aged 55-64 feel in control of their finances

30%

of those earning $50k-$70k

78%

feel they control their long-term savings

49%

of those aged 18-34

When I Win the Lottery

An unexpected inheritance, proceeds from a business sale or a sizeable tax refund—we all dream of windfalls. No sooner does the excitement wear off than the question arises: What do I do with the money?

Asked what they’d do if $50,000 fell into their laps, millennials focused on paying off looming student debts. At age 55 or older, respondents tended to list gifts to grandchildren and family as priorities. While men cite retirement saving as a likely use, women increasingly favor using a portion for a car, a vacation or home improvements.

The same holds true of tax refunds. While men are more inclined than women to save all or most of a refund, 75% of all savers save, while just 9% say they spend it all.

A $50,000 Windfall:

I would set $30,000 aside for retirement and divide the remaining $20,000 between paying off debt and donations to charity.”

–Man, 32

HOW WOULD YOU SPEND A

$500 Windfall?

Men: Go out to dinner Women: Make a purchase Millennials: Pay down student loans People Aged 55-plus: Donate

HOW WOULD YOU SPEND A

$50,000 Windfall?

Men: Save for retirement Women: Home improvements Millennials: Pay down student loans People Aged 55-plus: Give to grandchildren and family

Tax Matters

While taxes may be inevitable, the extent to which savers worry over them, take steps to reduce them and prepare their returns varies.

WOMEN
DREAD
TAX
TIME
MORE
THAN
MEN

35%

TO

27%

vs.

Savers who hire a tax preparer are more likely than self-preparers to reduce their taxable income using:

Chariable Donations:

74%

VS.

65%

Contributing to a retirement find

64%

VS.

59%

Investing:

50%

VS.

43%

Money & Saving