When the average American searches her pockets for savings, there often isn't much left over. 

At the end of 2014, how much money did you have left over to save for retirement, college, a down payment on a house, or just a rainy day?

If you're anything like the average American, the answer is most assuredly: not much!

Many financial writers, myself included, bemoan the fact that Americans don't save enough for retirement. By looking at statistics recently released by the Bureau of Labor Statistics' 2014 Consumer Expenditure Survey, it becomes crystal clear why this is the case: Over 50% of American households ran a deficit, or lost money, last year.

If we just look at one data point, we might not think this is the case. The mean American household was able to save roughly $4,900 last year. That doesn't include money that was taken out of paychecks for future income from pensions or Social Security -- so the number is probably even a little higher.

But the problem with this figure is that it is the mean, and this data point is highly influenced by high earners and savers. If we break down the average American household into deciles (the bottom 10% of earners, the next 10%, and so on), we get a very different picture.

To figure out which decile you would be a part of, add up your household's total income, and compare it against the following chart.


Income Range Before Taxes





















Source: Bureau of Labor Statistics, 2014 Consumer Expenditure Survey.

Once you figure out what decile your household is a part of, look and see how much the average American household within your decile is able to save each year. To help understand the numbers, I've simply subtracted each cohort's annual expenditures from its average household income after taxes.

Roughly half of American households aren't able to save a dime.

If you, the Foolish reader, are able to put away some money each year, you might be wondering who these households are that lost so much last year. There's no one definitive answer to that. Households in the lower deciles include the destitute, college students who take on debt to help pay for their expenses, young adults who rely on parents to pay their expenses, and those who use credit cards to pay for basic necessities they wouldn't otherwise be able to afford.

Clearly, for many families in the lower deciles, it isn't constructive to simply browbeat them and tell them to pull themselves up by the bootstraps. There are, without a doubt, structural inequalities that play a role in this situation.

At the same time, there are many households in the middle- to upper-income groups that could easily do a better job of saving for retirement. Let's take families in the sixth decile as an example. They earn roughly $45,000 to $60,000 per year, before taxes. But they're able to save only about $500 per year, for a savings rate (after taxes) of about 1%.

Yet this same cohort spends about $3,000 per year eating out and buying alcohol, $2,500 on entertainment, and another $600 on personal-care products. I am by no means saying that one should deny oneself everything to save for retirement. But if this spending in particular were cut in half, the household's savings rate would bump all the way up to 7%. That's a huge difference.

In the end, the recipe for securing financial independence and a comfortable future is the same as its ever been: Live below your means by finding your level of "Enough," and save and invest the difference. No matter what government statistics tell us, that equation will never change.

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