(CNN Money) — If you’re like most Americans, you’re not saving enough.
While there have been some improvements over the past few years in Americans’ household savings, we’re still among the worst savers in the industrialized world.
Around 44% of adults say they could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money, according to data from the Federal Reserve.
The dire savings rate, which dropped to 3.1% in September, according to newly released data from the Federal Reserve Bank of St. Louis, has some financial experts calling this a savings crisis.
With over a million bank accounts linked to MoneyLion, a consumer finance app, the firm has a first-hand look at what is going with its users’ savings. “What we see consistently is that the average savings balance is around $700,” said Tim Hong, chief marketing officer of MoneyLion. “And over 70% don’t have more than $2,000 in savings. It is a savings crisis, really.”
These three financial tools can help you take control of your own savings.
Acorns, a spare-change investment and saving app, is introducing Acorns Later, which allows you to invest in an IRA — a tax-advantaged way to save for the future.
“We’re in a savings crisis,” says Noah Kerner, the CEO of Acorns. “The majority of our customers don’t save into a 401(k).”
The IRA directly aims to help those in non-traditional work, like freelancers, part-time workers or people who do not have access to a 401(k) through their employer.
Acorns has intentionally eliminated the word “retirement” from the discussion. “A lot of people don’t feel that retirement is possible,” says Kerner. “A lot of people don’t plan to retire, they are following their passions. We just say this is money for later.”
Through Acorns Later, users can automatically invest part of their paycheck into a retirement fund. By enrolling, with as little as $5, Acorns will assist in your selection of the right type of IRA for your lifestyle and goals, each offering distinct tax advantages and eligibility. As with any IRA, there are tax implications for early withdrawals or transfers. The service will be available in January.
This consumer finance app is introducing MoneyLion Plus, a way to get the majority of Americans who do not have $1,000 in savings to reach that goal.
Why do Americans have so little savings?
“Fluctuating monthly income and expenses, combined with challenges accessing affordable credit, are derailing Americans’ savings goals,” says Diwakar Choubey, MoneyLion’s CEO and co-founder.
MoneyLion Plus aims to get users to a $2,000 savings goal in two years through a guided saving plans, simple investing, and access to low-cost loans.
Here’s the idea: bring the same methods that the big sharks use to build wealth, to everyone. When an unexpected expense arises, MoneyLion Plus users, even those with low credit-scores, can access a low-interest loan (5.99% APR) to cover the expense and keep their savings progress on track, using their investment account to collateralize the loan.
Users also have access to the MoneyLion tools, including ways to monitor credit, track spending, and earn rewards.
“We have a rewards program where people can earn points for good habits and redeem them for gift cards,” says Hong. “It is very motivating and better than rewarding yourself for spending on your credit cards.”
MoneyLion Plus costs $29 a month, but it comes with a dollar-a-day, cash-back bonus for logging into the app. “If they check in once a day, they’ll offset their monthly fee,” says Hong.
BrightPlan, a recently launched hybrid-robo advisor that provides financial planning, offers everyone the kind of personal holistic financial plan that was once only available to the wealthy.
You can work with an adviser to develop a tailored plan for your savings goals like buying a home, going on vacation, saving for kids or retirement.
The flat-fee service, at $20 a month, allows you to link your various accounts for a personalized dashboard of your progress. You can plan and track your goals, view simulations that show you how to speed up your progress, get tips and feedback, receive net worth and cash-flow advice and progress reporting. If you want to invest through the service you can get access to personalized financial planning from advisers and there is no management fee on the first $50,000 under investment.
“We project great, average and not so good market conditions for every goal,” says Marthin DeBeer, founder and CEO of BrightPlan. “Even in a worse case scenario.”
But hopefully, if that happens, you’ll have already saved up enough to get you through the storm.
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