The Commerce Department just reported what we all feared was true - Americans are spending more money than they are making. What is being called the "lowest personal savings rate since 1933," the nation's personal savings rate is now at a dismal negative 1%.
It's certainly not too late to make a New Year's resolution to set aside $100, $50, even $20 out of every paycheck into a savings account. Taking advantage of a high credit union dividend rate, you will be pleasantly surprised how quickly these deposits can add up!
http://www.usatoday.com/money/economy/income/2007-02-01-spending-incomes_x.htm?csp=34
2 comments:
I had trouble accessing the link and found the article on yahoo.
http://news.yahoo.com/s/ap/20070201/ap_on_bi_go_ec_fi/economy_37
If the middle class has lost their ability to save for the future then there is a grim economic forecast ahead. Soon, we are going to realize that we can not gauge our economy on the successes of Wall Street but on the fiscal well being of our citizens. If their are any teachers or parents out there-start financial education young and stress savings, teach them how to use direct deposit and payroll deduction- simple tools that make it easier to build up savings.
Direct deposit and payroll deductions are certainly key components to helping Americans save, but I truly think you hit the nail on the head with your financial education comment. Our schools are more apt to teach the difference between igneous and metamorphic rocks than they are to help students discern APR from APY. Until our citizens have the financial literacy to make educated financial decisions, this sad trend of spending more than we earn will likely continue. Thankfully, through credit union financial literacy programs and other fine organizations' efforts (NEFE, FDIC's MoneySmart, etc.), we are starting to respect the importance of educating each other about budgeting, credit usage, and the importance of saving.
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