According to a new survey from Discover, sixty percent of Americans say the pandemic made them realize just how little savings they have, and 71% say it made them want to consider saving more than they had previously. Most Americans (75%) report that they are saving either the same amount or more in 2021 than they did in 2020. Almost half of those who are saving (47%) are putting away less than $200 a month. Gen Z savers are saving the least, with 55% reporting savings under $200 a month, followed by 49% of Gen X and 47% of millennials. Americans say financial literacy is helping them save more, while non-savers don’t believe they make enough. For those who are saving more in 2021, 40% say it’s because they have a better understanding of how to set up a budget, and 34% say they are spending less as a result of pandemic limitations. Additionally, 22% are shoring up their savings in response to financial instability amid the pandemic. Savings habits vary by generation, yet over half of Gen Z and millennials credit an increased awareness of how to budget as the reason they’re saving more than they did a year ago (54% and 51% respectively). These generations are also the most likely to have sought resources to better understand how to budget and save amid the pandemic. 68% of Gen Z and 71% of millennials reported doing so. Just 9% of Americans say they are not saving at all.
Merrill Lynch Wealth Management published three studies examining the affluent Black/African American, LGBTQ+ and Hispanic/Latino communities. The first-of-its-kind research aim to better understand how individuals in these diverse communities achieve success and grow their wealth, their motivations and challenges and goals for the future. While the survey found many commonalities, within each of these communities notable themes emerged, as did differences when compared to the general population of affluent individuals:
Black/African American: With respect to their financial life, individuals in this community prioritize supporting family members, investing in the businesses of people they know, and securing wealth through entrepreneurship.
LGBTQ+: Starting a family is increasingly a goal, with nearly a quarter aspiring to get married and 13% of young LGBTQ+ (20-34 year olds) citing having a child as one of their most important financial goals (compared to 5% of LGBTQ+ 35-54 years old). Longer-term, more members of this community cite paying for healthcare and long-term care as an important financial goal (24% vs. affluent general population 17%).
Hispanic/Latino: Members of this community are four times as likely to cite that their most important financial goal is ‘planning to assist or support aging parents.’ One-in-five also say leaving an inheritance to their family is very important.
Motivators & Financial Priorities
Black/African American: Individuals in this community are two times more likely to be motivated by a desire for personal achievement. They are also 25% more likely to be motivated by a desire to set future generations up for success.
LGBTQ+: Members of this community are focused on being able to live authentically by pursuing activities they love or simply living life the way they want. They are also 45% more likely to view giving back to and supporting their community as a top priority.
Hispanic/Latino: 35% cite providing for their family as a top personal motivator. They are also three times as likely to be driven by a desire to make their family proud.
Black/African American: Individuals in this community face many of the same challenges as others; however, they’re twice as likely to be focused on reducing their current debt levels; 25% more likely to be supporting their family financially; and three times more likely to say paying for education is a source of stress.
LGBTQ+: One-third do not feel accepted by their family. As a result, 58% say they’ve had to chart their own path to financial independence.
Hispanic/Latino: Individuals in this community are more stressed about being able to pay household bills (17% vs. 12%) and balance financially caring for others while supporting themselves (15% vs. 12%).