As summer quickly approaches, many of us begin to think about making cuts here and there in a last minute effort to save some money for the Christmas season. Whether you’re planning a relaxing holiday away that requires a bit of extra moolah, or you simply require some extra cash to help cover all of those Christmas pressies, the savings struggle is all too real this time of year.
Despite our desire to have financial security and have extra money in the bank to do the things that we want to do, a recent survey found that many adults have next to no savings. The survey found that 69 percent of adults have less than $1000 of savings in the bank. The survey found that low levels of savings existed among people of all income levels, with nearly half of those who earned between $100,000 and $149,000 reporting savings of less than $1000.
So what is behind these low levels of savings? A study published in The Journal of Consumer Research found that there is an apparent disconnect people’s ability to discern the consequence of their spending if they do not pay with physical cash.
“When (consumers are) exposed to new products and thinking about paying with credit, they tend to focus on the good things about the product — the aesthetics of it, the features that are better than other products they’re considering, the sexiness and luxury of it,” researcher Randall Rose told the Chicago Tribune. “That’s as opposed to details related to cost, like the price, shipping cost, warranty cost, installation cost and effort.”