Why people don't save?

The inflation rate for Feb 2013 in the U.S. was 2.0 percent according to Bureau of Labor Statistics reported by http://www.tradingeconomics.com/united-states/inflation-cpi.  That is the annual rate projected from the inflation for a given month.

I just got my first quarter savings account statement.  The interest rate was 0.1 percent.

In other words, by putting my money in a local bank savings account, I am throwing some of it away.  If my account balance was $100 on January 1, then I would gain ten cents in interest but lose two dollars in purchase value by December 31!

Gosh, I remember when I had a savings and loan account in the late seventies, the interest rate was five percent "by law".  If you want to make more sense of "by law", see http://en.wikipedia.org/wiki/Savings_and_loan_association.  However, even that interest rate didn't cover the inflation rate, which varied from six to fifteen percent from 1977 through 1980.

That was a period of win some, lose some.  When inflation was "low", the net loss was "only" a dollar per year.  When inflation was high, the net loss was a whopping ten dollars a year.

Your homework is to find some period when savings accounts were a "win" for savings.  You might have to dig to get savings account interest rate beyond the last few years.

The only advantage that I see to a bank savings account is being able to walk in the door and withdraw a sum of money for some purchase.  It beats borrowing for that purchase.  And by paying by check or cash, you're depriving the credit card companies of their rake-offs.