Headline #1: “Most Americans Have Less than $1,000 in Savings”; Headline #2: People Saving Too Much is Now a Problem

A pair of conflicting headline stories caught my eye. One headline says Americans have too little savings while the other says we are saving so much that it’s a problem. Let’s have a look.
Most Americans Have Too Little Savings
MarketWatch reports Most Americans Have Less Than $1,000 in Savings.
Americans are living right on the edge – at least when it comes to financial planning.
Approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account, according to a new survey of more than 5,000 adults conducted this month by Google Consumer Survey for personal finance website GOBankingRates.com. ‘It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,’ says Cameron Huddleston, a personal finance analyst for the site. ‘They likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts to cover unexpected expenses.’
Why Have a Savings Account at All?
I have a question: Why have a savings account at all? Interest is roughly 0% so it effectively makes no difference whether money earns nothing in a “savings” account rather than nothing in a checking account, or nothing in a money market account.
That said, I agree with the overall message: people are not saving enough. Here’s a better way of stating the problem, also from the article.

This post was published at Global Economic Analysis on October 18, 2015.