It’s a theme we heard time and again during the run-up to the 2012 presidential election: Americans are making less money and have less money in savings than in years past. The statistics support the statements, as an October 2012 survey by The Huffington Post found 41% of Americans have less than $500 in savings, while a March 2012 estimate suggested more than one-third have less than $1,000 in emergency funds.
But even though many Americans are living precariously close to the edge, those stats don’t tell the full story. The website Daily Finance reports that in 2011, the average balance of an American’s savings account actually increased by about 3% – slightly higher than the rate of inflation – from approximately $5,700 to $5,900. It’s not great, but the number suggests that even in tough economic times, people are still making an effort to put money away for a rainy day.
That’s the idea behind this week’s featured post, Failure to Save Leads to Financial Disaster on Invest It Wisely. Staff writer Miss T reports that:
“Most people spend every cent of their income and have made no provision for saving. Household saving rates fell below the 1% mark in 2007 in the U.S. and are still among the lowest in the world.”
It’s a sobering statistic, and pretty easy to believe when you see your neighbors bring home a brand new big screen TV, only to lose their home to foreclosure a few months later (yes, that happened to me).
So what’s the best way to ameliorate this problem? The age-old advice of paying yourself first, suggests Miss T:
“The easiest way to do this is arrange to have your savings amount automatically transferred to a savings account each pay day. What you never see, you won’t miss, but you will have the peace of mind that comes with having some back-up funds.”
Here are some more posts that focus on saving for both the long haul and the short term:
Preparing for an Emergency [Couple Money]
Emergencies that result from a natural disaster require more than just a hefty savings account – in fact, having a lot of money in the bank or in your 401k likely won’t help you at all in a storm’s aftermath. Elle at Couple Money gives us a timely reminder what physical things we need to have on hand – basics such as batteries, bottled water, and cash. When it comes to storm preparedness, cash is king.
$600 Giveaway for the Holidays [Knowyourbank]
The folks over at Knowyourbank are giving away $600 in AMEX prepaid cards this holiday season – a great way to pad your savings before the end of the year. All you need to do is head over to the contest page and perform some actions to earn entries, including reviewing your favorites bank, liking and following great finance sites, and inviting friends to take part in the action. Good luck!
Best Places to Retire [Dinks Finance]
“We blog a lot about saving money for retirement on Dinks Finance, but what about spending your money during retirement?” asks Kristina at Dinks Finance. I love lists that give me an insight to what my life after retirement may entail, and this post provides 10 great places to spend those golden years.
How to Retire Early [Personal Dividends]
In a day and age when so many Americans are pushing their retirement further into the future, it can seem almost impossible to consider retiring early. However, Kevin at Personal Dividends presents a four-step plan that is quite easy to follow.
Thinking Beyond Your Salary [Give Me Back My Five Bucks]
When we think about our jobs, we tend to get caught up in the dollar amount of each paycheck. But as Krystal points out, that’s only part of what one should consider: “There are so many extra perks a job can have that can make it more satisfying, and taking the time to look beyond your salary range could mean saving tens of thousands of dollars over your career,” she writes.
5 Ways to Cut Back and Save Money [Financially Poor]
For some people, saving more money means finding a way to make more money. But what if expanding your intake isn’t possible? That’s when you must cut back. “By implementing simple actions, it is really possible to save more money than simply trying to put aside a monthly stash of cash,” advises Charles.
Why I Want Rich People to Buy Things and Spend Money [Money Reasons]
“When the rich (or those with high incomes) spend money, it makes the market more liquid and gives people jobs,” begins this post. Real world translation? The spending habits of the rich can increase the saving habits of those in the middle class. This tongue-in-cheek post may help you feel a little bit better about those one-percenters.