KJ: Before the Great Recession, the savings rate in the U.S. was at all-time lows. Then, just years after the recession started, savings rates had crept up to a more comfortable level. Now that things seem to be getting better in the economy, this number has started to fall back down to dangerous levels. See the JP Morgan chart below that outlines the savings rate of the average American. Pretty scary, huh?
With savings rates at such low levels, we need to figure out ways to bring it back up. The U.S. has been in a multi-decade long period where our savings rates have continued to shrink – especially compared to the levels of the 60’s and 70’s. Is it higher energy costs, easier access to high interest credit cards and loans, higher education costs, food costs, housing prices, or a combination of all of those that have caused this trend? Regardless of the cause of the trend, we all need to be a little better about how to break away from the trend and get on a sustainable path. Let’s get back to the basics of separating our needs from our wants. Maybe we don’t need two cars (and can survive as a one car family), can scale back on the dining out costs, and can get rid of the expensive TV (not quite able to break the first or last tie in our household!).
AJ: There seems to be an increased level of attention being paid to the haves and the have nots based on the great political debates currently brewing. Regardless of your political affiliation, the numbers in the above chart are pretty startling. Personally I’m concerned about the decreased level of focus individuals are placing on their own well-being and future planning with regards to their independent financial stability. Take time to analyze where you and your family stand with your own savings. Identify goals and obstacles and create a realistic plan to ensure you stay focused. We’re ultimately all responsible for the role we play in the future.
- What are you doing to keep your savings up?
Are you doing anything to beat the odds?
Tell us how you stay on track.
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