Nearly three-quarters, 71%, of Americans say they plan to shift their savings apach this summer to prioritize emergency savings and flexibility, according to a new Vanguard survey.
Consumers are taking to social media to express how they are “revenge saving" — paring back spending to rebuild their savings. Personal saving rate has increased from 3. 5% in December to 4.
5% in May, according to the Bureau of Economic Analysis.
Watch now2:1402:14Consumers shift to revenge saving as uncertainty loomsSquawk BoxAmericans are tightening their belts, as concerns tariffs, inflation, job security and market volatility have mpted many consumers to pare back their spending and increase their savings, financial experts say.
Personal saving rate — the percentage of disposable income that U. Households , after they pay taxes and spend money — has risen sharply this year, reaching 4.
5% in May, according to Bureau of Economic Analysis data released Friday. That is slightly down from 4. 9% in April, but up significantly from 3. 5% in December.
Some consumers may be changing their financial habits from so-called "revenge spending" — the trend of splurging after the pandemic — to "revenge saving," as they focus more on building savings and spending less.
"No buy" challenges are going viral on social media platforms TikTok and Reddit, as consumers vow to limit their discretionary spending, cut back on subscriptions and travel, and rebuild their savings.
More from Your Money:Here's a look at on how to manage, grow and tect your money for the years ahead. On-time debt payments aren’t a magic fix for your credit score.
Here’s why in uncertain times: Here's what investors should knowPrivate equity wants a larger piece of workplace retirement plan assetsA recent Vanguard survey found 71% of Americans polled plan to shift their savings apach this summer to prioritize emergency savings and flexibility.
The benefits of cash reservesFinancial advisors typically recommend consumers aim to set aside three to six months' worth of living expenses as a cash cushion.
But you might benefit from having more in some circumstances; for example, if you're a one-income household or your pay is variable, experts say.
Having ample cash reserves imves overall financial wellbeing, according to Vanguard reers.
"American workers are spending, on average, nearly seven hours each and every week thinking their finances," said Dina Caggiula, head of participant experience at Vanguard.
"But if you have sufficient emergency savings, we can cut that number nearly in half.
"Grace Cary | Moment | Getty ImagesSeveral factors are mpting consumers to be cautious and cut back, including fluid tariff negotiations, the spect of higher inflation and interest rates lingering at higher levels longer than some expected, financial advisors and reers say.
Many Americans are also concerned geo and social unrest. Some of the "revenge savings" trend is consumers wanting to amass cash to help shield themselves from unexpected cost increases in the future.
"This may be a lot of just defensive behavior or anticipatory behavior.
I may not need the money today, but I'm going to get access to that money in case I need it a few months down the road," said Charlie Wise, senior vice president and head of global re and consulting at TransUnion.
Saving with a long-term viewWorkers are also increasing the of pay they contribute to retirement savings plans, which has boosted the 401(k) savings rate to a record high.
A recent report from Fidelity, the nation's largest 401(k) vider, found 401(k) savings rates hit a record high in the first quarter of 2025, with a contribution rate of 9.
When you add matching contributions from employers, the savings rate for those plans rises to 14. 3%, edging closer to Fidelity's retirement savings rate of 15% a year.
Meanwhile, another report from Vanguard shows the average savings rate for employee deferrals was 7. 7% in 2024, matching record-high levels from the previous year.
More retirement plans are making it easier for workers to enroll and contribute through automatic enrollment and automatic escalation features.
"If you get money automatically out of people's paychecks, kind of the same way taxes come out of people's paychecks, if we can do that, most people end up saving a very high percentage of their income," said Jeff Schneble, CEO of Human Interest, a San Francisco-based firm that helps small companies set up 401(k) services.
Correction: Human Interest is based in San Francisco. An earlier version misstated where the firm is located. — CNBC Senior ducer Stephanie Dhue contributed reporting to this story.
Don’t miss these insights from CNBC Berkshire s drop double digits as 'Buffett premium' disappears, and some expect more sellingGoldman says 'TINA trade' is a and well, fueled by 401(k) buyingBest stocks: Defense, including these 2 names, may be in secular bull market as global conflicts mountGoldman Sachs says buy these five stocks that are set to rally: Money 101 is an eight-week learning course on financial freedom, dered weekly to your inbox.
here. It is also available in Spanish.
Watch nowwatch now02:14Consumers shift to revenge saving as uncertainty loomsSharon EppersonHow to tect financial assets amid immigration raids, deportation worriesSharon Eppersonwatch nowwatch now04:09On-time debt payments aren't a magic fix for your credit scoreSharon Epperson.