Aug 16, 2011

How Much Should We Save, Part 2

While the jury is still out on how much we should save, tonight I got some answers on how we, as Americans, do save. (All this fun information comes from the ABC News video clip below.)

I have to say, as a country, we're not there yet, but we're going in the right direction. 

First, the average American family has nearly $4700 in credit card debit which is down for the second year in a row. Now I guess that isn't all that bad. It's certainly more than Ross and I are comfortable with but we're admitted credit card-phobes.

Next Americans are having the least amount of credit card delinquencies in 17 years. Great job everyone! Round of applause!

OK, on to savings. Back in 2001 we were doing miserably y'all. Only saving* 1% on average. Can you believe it - that means a family making $100k was only saving $1000. Dismal! However, we're up to 5.4% now. We are definitely heading the right way but our average is no where near the suggestions of 10-30% that I stumbled upon last month.

Now somewhere I recently heard that the average American household income is $50,000. First, wow. Does that seem low to anyone else? I mean I realize not every household is 2 parents, 2 kids and a pet but many are and I'm sure many of those fall in that $50k ballpark. I can barely imagine how the 3 of us (Ross, me and Lexi that is) would survive on that, let alone support kids. But my point here is, if you are a family of 3 or 4 and you are making at or below $50k, I sure as hell see how saving 1-5% is an achievement for you. In fact, I'd like to congratulate if you just break even; for saving, you get a gold star.

Finally, here's what I find really uplifting in all this. 62% of Americans say even when better times are upon us, they still plan to be leaner with their personal finances. That's great! With any luck, this little boost of personal financial restraint will keep us all out of a boatload of trouble.

So hats off to you America. We may not be straight A students yet but darn it, one way or another, we're passing that personal finance class.

*The story doesn't define savings. If that includes money "saved" and then spent on things like vacation and Christmas, then that's a bit sadder of a story. If it includes net money saved at the end of the year, well, that's a much rosier picture.

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