A report that was released this week presents a look into the new reality for many Americans. Last year, 25% of Americans had no money in their savings account; this year, that number’s up to 28%. This means when an emergency strikes, their resources are limited.
For years, consumers have been told that six months of savings should be maintained at all times to cover life’s unexpected events, such as job losses. Half of Americans don’t have even three months put away and only 25% have the suggested six month cushion. This time last year, the number of those with at least three months salary cushion was at 46%.
Most consumers who participated in the survey revealed many factors. Most hadn’t received any kind of raise in their salaries, even as the cost of living continues to rise. This makes it difficult, if not impossible, to saving in the current economic environment. Not only that, but with unemployment numbers still hovering 8.5%, along with continued credit problems in many households, a savings account, while all agreed was important, is simply not in their zone of priorities at this time.
Still, there are those who say saving, even in difficult financial times, isn’t impossible. One analyst said it’s about getting into a habit; others dismissed that notion and said their habits are centered squarely on groceries, housing expenses and paying down debt.
Yeah, I’d love to build my savings account back up. There was a time I had more than a six month cushion. These days, I’m worried about when my unemployment benefits will run out. My short term goal is making sure my family eats and that they have a roof over their head. For anyone to say I just need to get in the habit is unplugged,
said one consumer we spoke with.
Another person we spoke with is just now seeing her financial situation improve, albeit slightly. “I’m one again putting some of my salary into my savings account via direct deposit. It’s a measly amount, but hopefully, I’ll have the bases covered again. Sooner rather than later”, she said as she laughed nervously.
Some people look for ways to save a few dollars here and there. Experts have touted simple steps anyone can take in order to trim the amount of money going out each month.
One way that energy experts have always suggested is keeping a closer eye on the thermostat. Turning up the temperature during the summer and turning it down during the winter are great strategies. The DOE recommends setting the air conditioner at 74 degrees and the furnace at 68 to keep a home comfortable while reducing energy costs. They also suggest using ceiling fans. During the summer, they should be spinning counter-clockwise, which causes hot air to rise and in the winter, ensure they’re blowing clockwise so that warm air is driven down.
There are many ways to save money with your credit cards. The best surefire way is to pay the balance each month. For those whose budgets are still not where they should be, financial experts suggest paying as much as possible each month. Every dollar you’re paying on top of the minimum amount is a dollar you’re not paying interest on.
Also, contact your credit card company and see if it’s willing to lower your interest rate. If you’ve been a solid customer, there’s a good chance the network will offer a better rate. If not, it might be in your best interest to consider transferring your balance to a lower APR credit card. Many have 0% intro rates for balance transfers for a specific period of time. This is a great way to work on paying down your credit card debt interest free for awhile. You’d be amazed at how much you save each month.
Traditional and e-coupons have really grown in popularity recently. With new sites like Groupon, you can even use your mobile phone’s GPS to find the best deals in town. If your favorite grocery store chain has an online coupon app, you can easily save money before you even walk in the door. Choose which coupons you’ll be using and when you’re paying, simply wave your smartphone over the scanner. You’ll want to check on this before you head out so that you’re shopping at the best store for saving money.
The fact is, it’s not likely going to get much better with the economy in the short term; in fact, all signs are pointing to an extended period of tough economics. That doesn’t have to hold true for your household, though. Even if you’re not able to save at this point, by taking advantage of various cost cutting measures, it’s like you’re putting money into your savings account every month.
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