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Personal savings growth in 2012

By David McMillin · Bankrate.com
Friday, January 6, 2012
Posted: 11 am ET

As the one-week anniversary of the New Year approaches, it looks like more consumers will be working to boost their savings accounts in 2012.

According to a Fidelity Investments study released in late 2011, 42 percent of respondents have personal finance resolutions this year, and most of those goals rely on more saving, less spending and smart money management. Here are a few highlights from the study:

  • Forty-six percent of respondents with resolutions rank saving more cash as their top priority.
  • The median annual savings target for these respondents is $2,400 -- a significant increase from the $1,200 goal in last year's study.
  • Nearly 20 percent of workers rank not saving enough during 2011 as their biggest financial mistake.

Call me an optimist, but I believe more consumers will actually stick to these goals in 2012. Why? Personal finances have shifted into the spotlight, and consumers seem to be truly counting their dollars. Perhaps the best evidence of this is the uproar over banking fees, a sign account holders are keeping a very close eye on their bottom lines.

That watchful eye continues to grow more cautious, too. As everyday account holders read headlines of potential government defaults and worry over shaky global stock markets, those savings strategies will continue. The study reports that 85 percent of respondents with financial resolutions for the new year will maintain their saving behavior as the economy recovers.

Fattening your savings account has additional perks, too. With growing minimum balance requirements at many banks, stashing away more reserve funds can also help account holders avoid monthly banking fees.

Now, I know a lot can change in a year. I've broken plenty of resolutions, but I'm curious to hear from readers about their personal finance plans in 2012. Are you planning to grow your savings in 2012? If so, how you will adjust your spending to meet your goal?

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2 Comments
Jen2
January 17, 2012 at 11:25 am

My goal is to increase our savings this year an additional $5,000 by depositing my dependant care savings account reimbursements into savings rather than using them for monthly bills. We hope to save enough to be able to sell our home at a loss and start fresh, hopefully with some money still in the bank so that we can have a second child before I am too old. Even though we bought after the bubble burst, our house was a terrible investment. Lesson learned. We saved roughly 5% of our gross pay last year in a savings account and 10% in retirement accounts.

Note to "Save First": although we put 10% of our pretax income into retirement savings we did not come close to the $16,500 limit.

Save First
January 07, 2012 at 11:18 pm

A 100% increase is a significant boost, but $2,400 is it? Really? That's barely enough for 1-2 mortgage payments.

European and Asian cultures have long promoted savings. Some countries stocked away upwards of 25% of income in the mid-2000's (before the most recent recession) while American's are under 1%. In understand savings contradicts market growth, but I will gladly exchange a feverish growth rate for a modest growth rate with increased national savings.

We save what is left over when we should be saving first and THEN spending what is left over. Max your 401k at $16,500, IRA at $5,000 per year, and ensure you have 3-6 months living expenses. After that, THEN you should determine how big your house can be and what kind of car you drive.

Priorities on personal finances in the country are completely backwards.