Chances are that you're a terrible saver. Don't hang your head in shame, though, since you're probably in good company.

According to July data from the St. Louis Federal Reserve, the personal saving rate is a meager 3.5%. To put this into another context, working Americans are socking away just $3.50 for every $100 in earned income. Comparatively, the saving rate was more than 12% five decades ago, which is in line with the 10% to 15% of earned income that financial advisors recommend workers save today.

A young woman with a confused look holding a piggy bank.

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News flash: You're probably terrible at saving money

But just how bad are things really? A Bankrate study released in January showed that 45% of survey-takers or their immediate family had an emergency last year that required them to come up with cash or a quick payment to fix a problem. However, just 41% of those surveyed had enough cash in their savings accounts or emergency savings to cover said emergency. Put another way, of the 249 million adults aged 18 or over, according to the July 1, 2016 U.S. Census Bureau estimates, 147 million of them don't have the capacity to handle an unexpected bill of $500 to $1,000 if their car breaks or if they come down with an illness. That's terrifying.

With little or no cash in the bank, you might be wondering how these poor savers handle their unexpected expenditures. Some will turn to their credit cards to cover their emergencies, which could be a dangerous idea given that credit card APRs hit their highest levels on record earlier this year. In other words, you could be lining the pockets of lenders, assuming you can repay the debt.

Other survey-takers suggested they would consider asking a family members for money, take out a home equity loan on their house, or perhaps take out a loan against their employer-sponsored 401(k). Each of these scenarios comes with negative implications, including the possibility of paying added interest on your emergency expense, or perhaps even putting your family member at a future financial disadvantage by taking away money they could be using their grow their own wealth and secure their retirement.

That's the bad news. Now here's the good news: This is fixable. No matter how bad the data gets, there are two really easy ways to improve your saving habits and grow what you do manage to put away.

A budget laid out on a table next to a pen and a smartphone.

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Formulate a saving plan and stick to it

The first thing Americans need to do to improve their financial situation is to formulate a budget and, perhaps more important, find a way to stick to it. According to data from Gallup back in 2013, just 32% of households were successfully following a detailed monthly budget, which explains why so many people have no money leftover at the end of each month.

Creating a budget is easier than ever these days, thanks to online budgeting software. Gone are the days where you have to sharpen your pencil and handle all the math and guesswork. After inputting in your income and expenses, some budgeting programs can even walk you through a step-by-step plan on how to reach your preferred saving goal.

The greater challenge might just be sticking to your budget once you've hashed things out. Here are a few helpful pointers that should keep you from wandering off path:

  • Set up automatic weekly, biweekly, or monthly withdrawals from your checking account to a saving or investment account to hold yourself accountable and remove the always popular "I forgot," excuse.
  • Considering using cash when making purchases in retail stores. While using credit cards leads to a tidy monthly statement, credit is an intangible form of money. Using cash requires you to hand over bills directly from your wallet or purse, thus making you think twice about making a discretionary purchase.
  • Do your best to get everyone in your household on a budget. Your chances of sticking to your budget will be higher if you surround yourself with like-minded people.
  • Make sure you devote about 30 minutes a month to analyzing your spending in the previous month. After all, a budget is there to keep you on track, but also to help in adjusting your saving and spending habits so you can live comfortably should an emergency arise.
A married couple reading a financial newspaper.

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Be smart with what you save

Aside from just socking away more of what we earn, we also have to be smarter with what we are saving.

According to Gallup, just 52% of American adults own stock, which ties an all-time record low, and is well below the all-time high of 65% hit before the Great Recession. Quite a few investors were scared away from the stock market during that downturn, and as a result they've missed the more than doubling in the broader market indexes since their March 2009 lows.

Historically, the stock market has delivered 7% annual gains, inclusive of dividend reinvestment, making it perhaps the best creator of wealth available to most Americans. While bonds and bank CDs generate a more guaranteed return, the yield on those assets is often well below the current inflation rate. One of the best ways right now to make real money (i.e., gains that outpace the inflation rate) is to consider investing some of your savings, once you've shored up your emergency account, into stocks. If you buy into the stock market with a multi-year, or preferably multi-decade, time horizon, you should come out the other side a winner -- at least that's what the long-term data suggests.

Americans may be terrible at saving money and investing what they do save for the time being, but we could completely flip the switch if we stuck to a budget and invested wisely.

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.