Are You Saving Enough in 2025? What the Data Says About Falling Short (Plus: Where to Keep Conservatorship Funds)

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Today on the show, we're saving you.

Wait, no, we're not saving you.

We're teaching you all about savings and why and how Americans are saving, or maybe they're not.

Welcome to NerdWallet Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds.

I'm Elizabeth Ayola.

Later this episode, we're going to be talking about how you can grow your savings when you're a conservator for a family member.

But first of all, our weekly money news roundup where we break down the latest in the world of finance to help you be smarter with your money.

Our news colleague, Ana Helhoski, is back.

Hey, Elizabeth.

At the start of the year, two in five Americans surveyed by Harris Poll on behalf of NerdWallet said that they had at least one savings goal for the year.

Now, to be honest, six months into 2025, I'm not really sticking to my savings goals, at least on every aspect of my life.

Retirement account, yes.

Emergency fund, not so much.

How about you?

I will say that this year, I am doing a lot better than last year with my savings goals.

So I picked three high-level goals and I'm definitely doing better, first of all, with my budgeting.

So what I'm actually doing or why I'm proud of myself is because I have restarted contributing to my emergency savings fund because I'm budgeting better.

I had pause on that for a while and it was a little stagnant.

And I'm also on track to max out my 401k again this year.

And I'm also contributing to other retirement accounts.

And guess the best part about it all, Ana?

What's that?

I'm automating everything.

Yay.

Forget it.

I'm jealous.

Good for you.

Congrats.

We should all be so lucky.

So let's take the temperature on how other people are saving.

Today, I'm talking with Aaron Elisa, NerWallet's resident data writer, on some of the findings of that savings report.

Welcome to Smart Money, Aaron.

Thanks, Anna.

Now, the ability to save varies drastically, depending on a whole host of factors, but there are some concerning trends in the report when it comes to how much people are saving.

What are some of the standout findings?

To the survey, employed Americans report saving 23% of their take-home income on average, which is great.

But nearly a quarter of Americans say they don't know how much they're saving.

and another 10% aren't saving anything at all consistently.

Still, most Americans are actively saving in a bank account for some future expense, which is promising.

One of the insights that stood out to me was the disconnect between want and ability.

So people may want to save, like me, but something holds them back from doing it.

And the most obvious thing holding people back is probably a lack of funds to begin with.

So for the sake of the conversation, what barriers do people with a healthy income face?

Rising costs over the past few years can't be dismissed, even for those with healthy salaries.

But for many, it might be their method of saving that's holding them back.

If you're saving in dribs and drabs, as opposed to intentionally making savings a non-negotiable line item in your budget, that could lead to less money set aside each month.

Let's break down some of the amounts that people are saving by percentage of income.

And what did you find there?

So, aside from that 10% who aren't saving anything regularly, 23% of employed Americans say they're saving between 1 and 10%.

15% say they're saving between 11 and 24%, and a quarter say they're saving 25% or more.

Then there's that extra 23 percent who aren't sure how much they're saving each month, which tells me they probably fall into the group that saves less consistently.

For those who are saving, what are they actually saving for?

What are some of their top priorities and what's falling by the wayside?

So emergencies and vacations are definitely the top two categories Americans are saving for, followed by car expenses, medical costs, and home expenses.

A few savings categories that aren't getting as much love are pet expenses, gifts and donations, and kid expenses.

Yeah, it's not just saving for big things that matter, right?

Small stuff is going to come up too.

My cat went to the vet a couple of months ago with a little cold, and I went home with a $500 bill.

And that's not the kind of stuff that you're planning for.

But while we can't really plan for when those things happen, we know they can happen, right?

So cars need repairs.

Kids outgrow all their clothes in the span of a week.

Ask me how I know.

And dogs eat weird things that need to be surgically removed.

Putting money aside for life's inevitabilities is a safeguard against having to go into credit card debt when we get hit with an unexpected expense.

I'm trying to think pretty intentionally about how I'm saving since I haven't been doing so well in that area of my life.

And lately, I've started to save for a big solo trip that I'm planning to take, but I also recently took a chunk out of my savings because I got a really, really good deal on a used car.

And I figured with tariffs kicking in at car dealerships, there was no time like the present.

But it can be a little scary to dip into your savings, even when it's the thing that you were saving for.

Oh, definitely.

And for me, I tend to view my emergency fund as a security blanket.

And having to use it feels like I'm giving up security, even though that's what it's for.

So currently, I'm rebuilding my emergency savings after using a big chunk of it on a family member's medical expenses.

And it makes me feel bad not having as much as I want in there, but I'm also grateful we had the fund set aside to handle that curveball.

There's a lot of guilt about money habits, right?

In case you haven't gotten the drift, I have a lot of that when it comes to savings.

What's one tip for how people can kick off savings if they've been neglecting it?

So much guilt.

And it can be overwhelming when you think about your overall goal if it's like thousands of dollars.

But putting away some amount of money consistently is a huge step in the right direction.

So a person who isn't saving anything can start with just 1% of their take-home income.

Someone who is saving consistently, but not as much as they want to, might increase their savings by 1%.

it seems like an insubstantial amount but over the years it adds up so let's say one percent of your income is forty five dollars a month that's five hundred and forty dollars in one year which means you don't have to put your cat's bet bill on a credit card that's accruing interest great tip and for people who can afford to save what are some of the ways that they're doing so are people more hands-on or setting and forgetting like elizabeth is So the most popular way Americans are saving, according to the survey, is sporadically.

43% of Americans with savings accounts say they transfer money from their checking account to savings at random intervals as they have the extra money.

And then others are automating.

So 29% automatically transfer a set amount to savings each week or month.

And 25% have part of their paycheck direct deposited into savings.

So whichever method gets you saving is great.

But automating is a good idea for those who have specific savings goals because then they don't have to spend time evaluating how much money to save each month, right?

So So set it, forget it.

The report mentions something about sinking funds.

And I can honestly say I've never heard of that before.

Can you explain?

I love sinking funds.

It's just a savings account or sub-savings account earmarked for certain planned expense that you save up for a little at a time.

For example, if you pay auto insurance twice a year, you might save up one sixth of the premium each month in a sinking fund.

Then when it's time to pay up, that money is ready for you and you don't have to scramble to come up with hundreds of dollars or more.

You could do the same with saving for holiday gifts or kids summer camp, which are two of my personal sinking funds.

What types of savings are out there that people might not be thinking of?

Because saving doesn't begin and end with a straight-up savings account with your bank, right?

Yeah, it really depends what you're saving for.

So for short-term goals, a high-yield savings account, either at your current bank or another bank, is a good way to earn decent interest while still keeping your cash liquid.

If your goal is a bit further out timeline-wise, you might consider a certificate of deposit deposit or CD that might have a higher interest rate, but requires you to leave your money alone for six months to a few years, depending on the terms.

For long-term goals like kids' college or retirement, an appropriate investment account can supercharge your return on your contributions while also helping you save on taxes in many cases.

So for college expenses, you might check out a 529 or an UTMA.

And for retirement, an IRA, 401k, 403B, because those big expenses are really hard to save enough for in a a regular savings account.

So we are halfway through the year.

For people who are feeling behind on their goals, what's one thing that they can do today, right after they finish today's episode, to make a dent in their savings?

Automate.

Automate 1% or 1% more of your take-home pay to savings.

So log into your bank account, set up a recurring transfer on your paydays for that amount, and then leave it alone until you're ready to increase it again.

Saving regularly, no matter the amount of money, is the key to making consistent progress.

All right.

Well, I I know what I'm going to be doing today.

Thanks for joining us today, Erin.

Thanks for having me.

And thank you, Ana.

Up next, speaking of savings, Sean is back and we're going to help answer a listener's question about how to grow savings when you're managing a family member's money.

But before we get into that, a reminder, my dear listeners, to send us your money questions.

Maybe you want to know how you should budget for your pet bills or you're thinking about how you can kick shame and guilt that's keeping you from achieving your own financial goals.

Whatever your money question is, you can send it to us.

You can leave us a voicemail or text us on the NerdHotline at 901-730-6373.

That's 901-730-NERD.

We also love emails and you can send those to us at podcast at nerdwallet.com.

In a moment, this episode's money question.

Stay with us.

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We are back and we're answering your money questions to help you make smarter financial decisions.

This episode's question comes from Kathy who sent us an email.

I am the court-appointed conservator for my sister-in-law.

She has no family left except for me.

I have $50,000 I would like to put into a savings account to earn a decent interest rate, but I do not know if these online banks will accept a conservator account.

Presently, I have her money in Wells Fargo, where when I first established the account, she earned 4.25% for one year.

Now it's something under 1%.

Can you suggest one of these online accounts where I might try to establish an account?

To help us answer Kathy's question on this episode of Smart Money, we are joined by banking writer Margaret Burnett.

Margaret, welcome back to Smart Money.

Thank you for having me.

Kathy, our listener, has a kind of complicated financial situation.

They are the conservator for their sister-in-law, which means that by law, Kathy makes all manner of decisions about their sister-in-law's well-being.

This includes how to manage their finances.

I want to first take a moment and appreciate all the work that Kathy must be taking on and also note how truly impressed I am that they are still hunting for the best rates on their savings, given everything else they must be juggling.

But as it relates to Kathy's question, Margaret, how do conservator accounts differ from regular savings accounts that you or I might open on our own?

Regular savings accounts are pretty straightforward.

You go online or to a branch, fill out an application with info like your name and address, show proof of your identity.

You get approved, hopefully, and then make your deposit.

It's your money and you can move it around as needed.

But conservatorship accounts are different.

They're set up to manage money for someone who can't handle their finances themselves, maybe due to illness or disability.

To open an account, you need court paperwork like letters of conservatorship, which proves that you're legally allowed to manage that person's money.

You make the decisions, but you also have to follow some strict rules and keep records and keep receipts.

Is spending or saving money in a conservatorship account similar to a typical account or are there key differences?

Well, you can spend money just like you would with an account, but because you're doing it on behalf of someone else, there are just some rules.

You have to keep records.

In some cases, you may need special permission before you can spend certain amounts of money or certain things you can spend but there are some differences.

Now Kathy has a very specific niche here because she's looking for a conservator account and now at NerdWallet we usually encourage people to shop around to find the right products for their financial goals and we have lots of roundups on the nerd wallet website that can help with this but not necessarily ones targeted towards conservator accounts.

So how do you suggest Kathy compare their options?

Well, you're right Elizabeth.

These types of accounts are pretty niche and it can be kind of hard to find one, but not impossible.

So I'd recommend starting with some of those Roundups.

Do an online search to zero in on some institutions that you like and then reach out to some customer service departments.

Make a few phone calls just to see if they really do offer these types of accounts.

And are there any online banks or neobanks that offer Conservator accounts?

So that's a good question.

I'll never say never, but the reality is you might not find these complex accounts at online banks and neobanks.

I called four leading online banks and, you know, just like Kathy's experience, they told me they didn't accept conservator accounts either.

So I guess you got to kind of remember online banks and neobanks, their platforms are built to be super streamlined, low cost, and digital first.

And that's great for everyday banking.

It's great when you're looking for great interest rates, but it's not so great when it comes to being able to handle that extra paperwork or that extra oversight that's really required for conservator accounts.

So you can do an online search for banks, but the ones that exist only online are usually not set up to offer these types of accounts.

So it seems like Kathy should look into options that are not online banks.

I'm thinking maybe a credit union could be a good place to start.

What do you think about that?

Bingo.

That's the move, I think, because credit unions tend to be a little more flexible and they can also offer additional products, including things like these conservator accounts.

Big banks can have them too, but a credit union in your community, they might offer more personalized service.

And that's going to be important for this type of banking need that Kathy described.

You can kind of get started by looking for some credit unions online, maybe some community banks that are in your area, just to get a feel for what they have to offer in terms of regular products, in terms of their rates, in terms of their fees, whether you can join join them, if there are any membership requirements.

And then if you see some that you like, you can do online searches with the names of the credit union and maybe the word conservatorship to see if they offer the accounts and if they talk about the accounts on their website.

So we do have a lot of roundups to Elizabeth's point, and we'll link to some of them in today's show notes so that you can start your online search.

I think people don't realize how helpful credit unions can be as gateways into other financial products that might be better for them in general.

I'm thinking here about how credit unions often offer really competitive rates on things like auto loans, but you have to be a member first to be able to take advantage of that.

I think if Kathy or anyone else is looking for a pretty niche product like a conservator account, find a credit union that might offer one and then sign up with them.

And then it would be easier, I would assume, from that point on to open such an account.

Is that right, Margaret?

That's absolutely right.

And it comes back to that personalized service, a credit union that's near you or can service your area.

You can use that to your advantage.

Would there be any downsides to working with a credit union for something like this compared to maybe going with a larger, well-known bank like Wells Fargo?

Well, it depends on how well versed they are in conservatorship accounts.

And I think you'll get a feel for that pretty quickly.

If you reach out to their customer service compared to a large bank's customer service, maybe ask some specific questions about your account and your situation.

That would be the first thing I would look for in terms of a potential red flag.

But if they advertise it, if their website lists these types of accounts, then perhaps they would be really good.

And it would be a really good step for you to kind of reach out to them to be a potential member.

Kathy also mentioned that they had their money in a Wells Fargo account that was earning over 4% annual percentage yield on their savings, but then it dropped to below 1%.

Do you know why that might have happened?

I know that several banks will raise or lower their APYs as the Fed changes interest rates, but this drop is beyond what the Fed has done over the past year.

So what are your thoughts, Margaret?

Honestly, it's kind of surprising that Kathy was earning that high of a yield.

The standard savings account at Wills Fargo is closer to 0.01%.

And even their higher tier premium account caps out at around 2.5%.

So there might have been some some special short-term promo rate or some other type of account being referenced.

But if you were earning more than 4%

before,

I think it's worth it to reach out to any bank that you are banking at.

And if the rate dropped, you could ask.

You could say, hey, as a valued customer, can I continue with this yield or something close to it?

You know, it may not work, but it's worth asking as a first step.

And then, you know, outside of that, you can still find above average rates.

The national average for savings accounts right now is only 0.42%.

So if you're still earning close to a 1% yield, you're still doing better than average.

Yeah, but it wouldn't be that around 4% rate that a lot of folks can get if they are opting to keep their money with an online bank, which I think is why Kathy wants to go that route to begin with.

Absolutely.

It's worth making some phone calls.

It's worth trying to see if you can do that.

Again, I reached out to some of the leading leading online banks before, and they don't offer conservatorship accounts.

So it could be that there may be a little bit of a trade-off.

And going back to the idea of credit unions, while they do have a lot of wonderful perks, their rates also aren't typically as high as what folks can get from an online bank, right?

That's right.

You'd probably still want to search there just to see.

Check out the list of the best online savings accounts.

We'll drop a link to that in our notes as well.

But if you have a very complex need, it would be good to kind of start there, but also expand the universe of other types of institutions that you'd be willing to reach out to.

And with something with such a specific functional need like a conservator account, I think being able to ensure that you can manage the money easily would override any sort of yield that you would get from it.

If you can get a better yield on it, that would be fantastic.

But first and foremost, you want to make sure you can manage that money easily.

Yes, very true.

Very good point.

Kathy also asked if we could suggest an online bank where they could open a conservator account.

And it's not our place to suggest one specific bank or account for our listeners.

We always encourage folks to do their own research using the excellent nerdy info that we provide and then make their own informed decisions.

But with that in mind, Margaret, what features do you think that Kathy or anyone shopping for an online savings account should be comparing when they're looking at one institution or another?

For anyone shopping for an online account, whether it's from a bank or a credit union, the big things things to look for are the interest rate and also the fees.

You want a high rate, you want low fees, and also how easy it is to access your money.

The best online accounts today have no monthly fees and they earn yields of around that 3% or 4%.

And you can access your money via electronic transfer.

In Kathy's case, there may be more important factors that come into play, such as the ability to handle conservatorship accounts, of course, and also customer service ratings.

So when we review banks, we note customer experience scores by looking at things like how many hours per day someone is available by phone if you have to call with the need, and also how highly rated their mobile apps are.

So you kind of want to look for how easy it is to reach the bank if you have a problem.

And I think that might be an especially

important factor for Kathy, given the complexity of what is going on with a conservator account.

They might need a little extra assistance in double checking that everything is going through properly according to how they legally have to manage this money.

Absolutely.

You want that extra help by your side.

Margaret, to wrap things up, what would you say is the key takeaway or nerdy tip that you have for this listener?

I think overall, and this is advice for anyone, it comes down to finding the best fit for your needs.

Yes, we all want the best rates.

We all want the lowest fees.

We all want customer service at a level that matches what our needs are.

And if you can find the best fit from this search, then I think that that's the biggest takeaway, that you absolutely can find the best fit for your needs.

Well, Margaret Burnett, banking nerd at NerdWallet, thank you so much for coming on and chatting with us.

All right.

Thank you for having me.

And that's all we have for this episode.

Remember, listener, that we are here to answer your money questions.

So turn to the nerds and call or text us your questions at 901-730-6373.

That's 901-730-N-E-R-D.

You can also email us at podcast at nerdwallet.com.

Join us next time for an episode where we take on a bunch of questions about the housing market and homebuying.

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Here's our brief disclaimer.

We are not your financial or investment advisors.

This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

This episode was produced by Tess Wiglund and Anna Helhaski.

Hilary Georgi helped with editing, Nick Karissimi mixed our audio, and a big thank you to Nerdwall's editors for all their help.

And with that said, until next time, turn to the nerds.