Saving smarter, not harder: How to build sustainable savings habits.

© International Foundation for World Freedom

Zoie Plyler, Research Assistant

17 November 2025

Why do most Americans struggle to save?

Financial insecurity is a major source of stress for Americans—each year, a greater number of people view their financial situation as deteriorating. Borrowing and debt are also on the rise, and less than half of Americans surveyed by Pew Research in April 2025 say they have enough emergency savings to cover three months of living expenses. Overall, Americans are making more money than ever before, but most still feel behind on savings goals.

The root causes of this struggle with saving can be both tangible and more abstract. Tangible challenges are financial situations that can be interpreted in a straightforward manner. These are factors like a lack of support network, inherited debt, low income, medical expenses, etc. These are sometimes perceived as having more direct influence on an individual’s ability to save, but these circumstances often stem from or are worsened by abstract or less visible challenges.

Cultural, psychological, and social challenges are those that relate to the way people perceive finances and are typically more difficult to discern. These include limited financial literacy, consumer culture, and overall financial anxiety or unhealthy relationship with money. Although these causes are less visible than high levels of debt or a tight income to expenses ratio, it’s still vital to recognize their impact.

Expenses will continue to add up and produce more financial insecurity if unhealthy habits are not addressed. Changing one’s perspective on money and building positive savings habits can have a domino effect on financial wellbeing.

People in the U.S. are uniquely susceptible to cultural factors to saving. We are influenced on all fronts by consumer culture: advertising campaigns and algorithms are designed to maximize profits, not consumer wellbeing, and they are remarkably successful at convincing people to buy things they don’t need. Pressure from friends and family leads people to overspend for social capital.

Motivation and consistency

Motivation to save can be difficult when in the wrong mindset. Many Americans, especially young people, say they don’t have a savings account because they simply haven’t gotten around to it (CNBC 2025). Due to various economic factors (low income to high expense ratios, predatory resources, institutional/educational barriers), the average American tends to associate money with fear and uncertainty. We tend to avoid thinking about things that stress us out, especially when compounded with circumstances like long work/school hours, medical burdens, emotional stress, or other hardships. Further, Americans tend to have an aversion to talking about money with friends and family.

Understanding that the time it takes to set up a savings account is miniscule when weighed against the benefit of building healthy savings is essential to getting in the right mindset with money.

Consistency is the key to building any habit. Consistence in putting away savings will help produce a healthy attitude toward money both as a form of habit/conditioning and as a form of gratification when seeing the money in the accounts go up. Consistency can be difficult to achieve, especially in an unpredictable economic environment. Maintain consistency and habits by reinforcing motivation and realizing that one mistake doesn’t reset progress.

Tools and methods

Visualizing the long-term benefits of saving can help maintain motivation. For instance, moving from paycheck-to-paycheck anxiety to a more financially secure situation allows people to focus more emotional energy on things like family matters, education, or stress-relieving activities, which in turn can reduce the mindset that enables impulsive spending.

Setting up a healthy savings environment helps maintain consistency. E.g., setting up automatic transfers to set away a reasonable amount of money each month according to budgets, and making savings hard to reach, such as setting up an account in a different bank than the checking account. Furthermore, studies show we are more likely to stick to a plan when we’re held accountable by others (Klein et al. 2020).

Building a habit of personal accountability also helps with consistency. Checking every purchase as an impulse—whether it’s necessary or instant gratification—helps avoid emotional spending. Individuals should set aside a budget for wants and stick to it.

IFWF workshops

IFWF can help Americans reach a healthy place with their savings not only by focusing on the tangible aspects of personal finances (walkthroughs for setting accounts, personal financial plan and budget development, investment training, etc.) but also by introducing curriculum on the behavioral side of financial literacy.

Curriculum focused on personal financial behavior should always be accompanied by training in traditional financial literacy topics, as familiarity and confidence in money matters are the foundation for making healthy financial decisions. These classes can go beyond traditional curricula by addressing the link between mentality and financial behavior and offering methods of overcoming unhealthy financial mindsets.

General savings tools and goals:

-              Emergency fund—aim first for $1,000 in savings, then for at least 3 months of living expenses (rent, food, pets, debt payments, etc.)

-              Retirement funds (IRAs, savings bonds, and 401ks)

-              Completely re-evaluating finances and spending habits and dedicating time to regularly take stock of financial health.

-              Switching banks—there could be a better financial institution for a person’s situation. Does the institution have hidden fees/low return on savings? Is banking inconvenient? Individuals should consider moving funds to a bank that has services that have easy online banking, high returns on savings accounts, and no account fees.

-              Budgeting and the 50/30/20 rule: 50% to necessities, 30% to other spending, 20% to debt and savings

Behavioral dimension:

-              Understanding the negative feedback loop between mental health and an unhealthy relationship with money: being in a bad financial situation can lead to psychological discomfort, which can lead to poor financial decisions, etc.

-              Overall financial anxiety and stress lead to avoidance. Dedicating time to evaluate personal finances and making a solid budget (can be accomplished in workshop) helps alleviate some stress and uncertainty.

-              Impulsive and emotional spending; avoid using money as a coping mechanism.

o   Telling a trusted friend or family to help with accountability when signs of potential overspending arise

o   Delaying purchases by a few days or a week

o   Avoiding social media and recognizing when the desire to purchase an item is based on social pressure (mind.org 2022)

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Sources

Klein, Howard J., Robert B. Lount Jr., Hye Min Park, and Brandon J. Linford. "When Goals Are Known: The Effects of Audience Relative Status on Goal Commitment and Performance." Journal of Applied Psychology 105, no. 4 (2020): 372–89. https://doi.org/10.1037/apl0000441.

Mind. "The Link Between Money and Mental Health." Mind, 2022. Accessed November 16, 2025. https://www.mind.org.uk/information-support/tips-for-everyday-living/money-and-mental-health/the-link-between-money-and-mental-health/.

Parker, Kim, and Luona Lin. "Growing Share of U.S. Adults Say Their Personal Finances Will Be Worse a Year from Now." Pew Research Center, May 7, 2025. https://www.pewresearch.org/short-reads/2025/05/07/growing-share-of-us-adults-say-their-personal-finances-will-be-worse-a-year-from-now/.

Winters, Mike. "42% of Americans under 30 Say They're 'Barely Getting by' Financially, Harvard Survey Finds." CNBC, April 24, 2025. https://www.cnbc.com/2025/04/24/harvard-survey-younger-americans-barely-getting-by.html.