--- title: People's Savings Are Plummeting to Pre-Pandemic Levels — and That's a Good Thing description: A decrease in the personal savings rate is actually healthy from a macroeconomic perspective, experts say. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 497 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ published: '2021-11-03T17:21:48.000Z' modified: '2024-01-10T16:56:46.000Z' section: Personal Finance tags: - News word_count: 653 canonical: https://money.com/personal-savings-rate-pandemic/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo of a piggy bank in top view, the slit is a downward arrow](https://img.money.com/2021/11/News-Savings-Plummeting-2021.jpg) Consumers are saving at the lowest rate since the pandemic ravaged the economy last year — and some experts say that's a good thing. New numbers from the [**Bureau of Economic Analysis**](https://www.bea.gov/data/income-saving/personal-saving-rate) (BEA) show the personal savings rate for September was 7.5%, which is a 22.3-percentage-point plummet from an all-time high in April, 2020. September’s rate is also a notable dip from the previous month, which was 9.2%. On its face, a free-falling savings rate sounds bad. But experts say this is actually good news for the economy. “It’s truly indicative that things are normalizing,” Maria Solovieva, an economist and CFA at TD Economics, says. Solovieva says this drop in savings is largely due to the expiration of pandemic unemployment benefits, which sunset in September, as well as strong spending from consumers despite the delta variant of the coronavirus. The shrinking savings rate indicates that folks now have more places to spend their money, in contrast to earlier in the pandemic, when non-essential businesses had to shutter. Then, most people were stuck at home. They could buy some goods online, but they couldn’t go out to spend their money on food, entertainment and other services like they used to. There were only so many washing machines, cars or remote-office supplies people could buy, Solovieva says. Such restrictions on how people could spend money — paired with stimulus checks and other benefits — caused the personal savings rate to soar. So what is the personal savings rate, exactly? Take it straight from the BEA: “The U.S. personal saving rate is personal saving as a percentage of disposable personal income,” according to the BEA. “In other words, it's the percentage of people's incomes left after they pay taxes and spend money.” And that calculation includes all sources of income: cash gifts, government benefits — any and all money coming in. ## Back to ‘normal’ personal savings rate? It’s difficult to put a hard number on a “normal” or “healthy” personal savings rate, Solovieva says. It all depends on the context of the time. What we do know for sure: There really is such a thing as too much savings. That 33.8% figure from April 2020? Way too high. The only remotely comparable period was during World War II, when the government rationed goods, repurposed assembly lines to produce tanks and guns and encouraged everyday folks to save their money. Even then, in the midst of largest war in history, the personal savings peaked at 27.9% in 1944. For those keeping track, that’s a whopping 5.9 percentage points lower than the record-high reached earlier in the pandemic. In terms of an individual budget, saving a third of your income sounds great (financial advisors say you should [aim to save 15% of your salary for retirement](https://money.com/save-for-retirement/), including any company 401(k) match)**.** But on a macro level, it has a cascading effect: When consumers are saving at such a high rate, that means they’re not spending. A lack of spending means a lack of income for businesses. Then those businesses have to shutter, and people lose jobs. So it goes. “That brings down the whole economy,” Solovieva says. Contextually, the current savings rate of 7.5% shows consumers are back to saving at precisely pre-pandemic levels. That's coincidentally the average savings rate over the past 10 years before the pandemic, Solovieva says. And that's a healthy level, from a macroeconomic perspective. In the coming months, she expects a strong holiday season in terms of consumer spending. According to [her research](https://economics.td.com/us-excess-savings) at TD Economics, consumers stockpiled an estimated $2.7 trillion over the course of the pandemic, and a least some of that money is going to be spent over the holidays. So don’t be alarmed if the savings rate dips modestly during the winter. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/personal-savings-rate-pandemic/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Personal Finance", "item": "https://money.com/personal-finance/" }, { "@type": "ListItem", "position": 3, "name": "Saving Money", "item": "https://money.com/saving-money/" }, { "@type": "ListItem", "position": 4, "name": "People's Savings Are Plummeting to Pre-Pandemic Levels — and That's a Good Thing" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/personal-savings-rate-pandemic/#webpage", "url": "https://money.com/personal-savings-rate-pandemic/", "name": "People's Savings Are Plummeting to Pre-Pandemic Levels — and That's a Good Thing", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2021-11-03T17:21:48.000Z", "mainEntity": { "@id": "https://money.com/personal-savings-rate-pandemic/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/personal-savings-rate-pandemic/#breadcrumb" }, "dateModified": "2024-01-10T16:56:46.000Z" }, { "@type": "NewsArticle", "headline": "People's Savings Are Plummeting to Pre-Pandemic Levels — and That's a Good Thing", "articleSection": "Personal Finance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2021/11/News-Savings-Plummeting-2021.jpg", "width": 2880, "height": 1920, "caption": "News-Savings-Plummeting-2021" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers.", "image": "https://img.money.com/2022/01/a_adam-hardy.jpg?quality=85&w=400&h=440&crop=1", "email": "adam.hardy@money.com", "jobTitle": "Lead Data Reporter", "alumniOf": "University of South Florida, BA, Magazine Journalism", "subjectOf": [ { "@type": "WebPage", "url": "https://www.thepennyhoarder.com/", "name": "The Penny Hoarder" }, { "@type": "WebPage", "url": "https://www.forbes.com/advisor/", "name": "Forbes Advisor" }, { "@type": "WebPage", "url": "https://creativeloafing.com/", "name": "Creative Loafing" }, { "@type": "WebPage", "url": "https://www.nytimes.com/2023/05/01/opinion/biden-trump-harris-2024.html", "name": "The New York Times" }, { "@type": "WebPage", "url": "https://www.washingtonpost.com/opinions/2022/12/26/flexible-spending-account-is-flawed-benefit/", "name": "The Washington Post" }, { "@type": "WebPage", "url": "https://www.bloomberg.com/opinion/articles/2025-09-20/-100-000-h-1b-visa-fee-is-a-gamble-that-could-protect-us-jobs", "name": "Bloomberg" }, { "@type": "WebPage", "url": "https://petrieflom.law.harvard.edu/2024/02/08/whoop-and-the-irs-how-tax-avoidance-helps-health/", "name": "Harvard Law School" }, { "@type": "WebPage", "url": "https://www.federalregister.gov/documents/2025/12/29/2025-23853/weighted-selection-process-for-registrants-and-petitioners-seeking-to-file-cap-subject-h-1b#footnote-33-p60883", "name": "The Federal Register" }, { "@type": "WebPage", "url": "https://www.nclc.org/resources/what-states-can-do-to-stop-credit-reporting-abuses/", "name": "National Consumer Law Center" }, { "@type": "WebPage", "url": "https://www.cbsnews.com/news/open-enrollment-irs-changes-fsa-hsa-flexible-spending-account-health-savings-account-2023/", "name": "CBS News" }, { "@type": "WebPage", "url": "https://www.beckershospitalreview.com/rankings-and-ratings/20-top-us-hospitals-for-2025-per-money/", "name": "Becker's Hospital Review" }, { "@type": "WebPage", "url": "https://www.businessinsider.com/using-chatgpt-ai-write-cover-letters-job-applications-2023-2", "name": "Business Insider" }, { "@type": "WebPage", "url": "https://www.motherjones.com/politics/2026/04/a-major-strike-of-beef-workers-pauses-in-colorado-but-workers-say-the-fight-isnt-over/", "name": "Mother Jones" }, { "@type": "WebPage", "url": "https://theweek.com/business/economy/job-market-frozen-thawing", "name": "The Week" }, { "@type": "WebPage", "url": "https://fortune.com/2023/12/20/workers-lose-money-on-unused-fsa-accounts-deadlines-what-companies-should-do/", "name": "Fortune" }, { "@type": "WebPage", "url": "https://www.inquirer.com/opinion/editorials/liberation-day-tariffs-economy-stock-market-trump-20250401.html", "name": "The Philadelphia Inquirer" }, { "@type": "WebPage", "url": "https://www.nasfaa.org/news-item/37955/Student_Loan_Changes_2026_New_Repayment_Options_Taxable_Forgiveness_and_More_on_the_Way", "name": "National Association of Student Financial Aid Administrators (NAFSAA)" }, { "@type": "WebPage", "url": "https://eab.com/resources/blog/adult-education-blog/graduate-funding-shift-pricing-aid-strategies-aligned/", "name": "Education Advisory Board (EAB)" }, { "@type": "WebPage", "url": "https://ticas.org/california/state-private-loans-protections-blog/", "name": "The Institute for College Access & Success (TICAS)" }, { "@type": "WebPage", "url": "https://thismorningwithgordondeal.com/b/This-Morning-with-Gordon-Deal-August-04,-2026/421564107823081285.html", "name": "This Morning with Gordon Deal" }, { "@type": "WebPage", "url": "https://www.empower.com/the-currency/life/pumpkin-spice-season-spending", "name": "Empower" }, { "@type": "WebPage", "url": "https://www.reddit.com/r/Economics/comments/1va10oa/comment/p0i9bju/", "name": "Reddit" } ], "sameAs": [ "https://www.x.com/hardyjournalism", "https://www.linkedin.com/in/hardyjournalism/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2021-11-03T17:21:48.000Z", "description": "A decrease in the personal savings rate is actually healthy from a macroeconomic perspective, experts say.", "abstract": "A decrease in the personal savings rate is actually healthy from a macroeconomic perspective, experts say.", "@id": "https://money.com/personal-savings-rate-pandemic/", "inLanguage": "en-US", "dateModified": "2024-01-10T16:56:46.000Z", "wordCount": 653, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Personal finance", "sameAs": [ "https://en.wikipedia.org/wiki/Personal_finance" ] }, { "@type": "Thing", "name": "Saving", "sameAs": [ "https://en.wikipedia.org/wiki/Saving" ] }, { "@type": "Thing", "name": "COVID-19", "sameAs": [ "https://en.wikipedia.org/wiki/COVID-19" ] } ] } ] } ```