Savings Rate

American Savings Rate

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When the great recession started in 2008, many Americans became concerned with the direction of the economy. Americans started holding back on large purchases and started trading down when it came to grocery shopping. More meals were cooked at home and less people dined out. Additionally, Americans also started saving more. However, this phenomenon has recently stopped once again. Americans have a history of not doing a good job at saving but as a recent surveys point out, we are worst than ever. The news from the latest survey from bankrate.com suggests that 76 percent of Americans don’t have enough savings to cover at least six months of emergency expenses. This report probably won’t shock anyone who has been watching the deteriorating state of Main Street finances. Families have been stretched to the limit. Many dipped into 401(k) s during the recession as unemployment surged beyond 8 percent. Adding salt to that wound is the finding that more than one quarter of those surveyed had no emergency savings at all. (Wasik, 2013). In fact, the debt markets are creeping back in and since household incomes are back to levels last seen in the 1990s adjusting for inflation, many people are simply supplementing this lack of income growth with high levels of debt.  Many people are still living day to day because the dollar simply does not stretch as far as it once did. Additionally, we all have a certain responsibility in managing our wants and needs. As a consumption society, most Americans spend more than they make. Most are using credit cards and debt to fuel their lifestyle. The U.S. government also plays a big role in encouraging America's spending frenzy, sometimes in not so subtle ways. In December 2006, President George W. Bush said that the best thing Americans could do for the country was "to go shopping." (Kramer, 2013) In...