Americans just don't seem to learn their lesson.
Despite stagnant wages, escalating costs and a bleak economic outlook, more than half have splurged on a discretionary item in the last month, according to a survey by
. Many put emotion over logic, with 47% saying they spent the extra cash because "it just feels good."
HSBC Direct's survey found that one in five Americans say saving 10% of their income is harder than quitting smoking, losing 15 pounds or working out regularly. No wonder the U.S. savings rate has plummeted to just four-tenths of a percent of disposable income from 4.7% a decade ago and 7.2% two decades ago.
"These findings show us how emotional some personal finance decisions can be," says Kevin Martin, an executive vice president at HSBC. "It's clear from the survey that Americans have good intentions to save more, but at the end of the day, many are still treating themselves and others."
About 42% of respondents splurged on themselves in the last month, while 51% splurged on others. Top guilty pleasures were a weekend away or a less costly trip to the movies. The findings seem to contradict benchmark surveys, which put consumer confidence at an all-time low, though spending
with how shoppers view the economy.
While socking away discretionary funds is wiser than going on a spur-of-the-moment trip to the Bahamas, it's tough for consumers to figure out the best place to store their cash. Savings rates have declined to levels below inflation -- which surged to 5% in June due to rising oil and food prices. Stock investments have provided weaker gains -- if any -- as the market gyrated into bear territory.
HSBC released the survey in conjunction with an announcement that its promotional rate of 3.5% for online savings accounts would be extended for an additional month, through Sept. 15. The average interest rate for savings accounts now stands at 0.41%, according to BankingMyWay.com, while the average rate on a 12-month CD is 2.39%.
Online accounts tend to provide higher rates because there are no overhead costs related to brick-and-mortar branch locations. Credit unions also offer higher rates because they are customer-owned and not profit-driven like banks. Consumers can check out the best rates in their local area by entering their zip codes at BankingMyWay.com.