Why our savings rate is falling, and what to do about it

first_imgPaying yourself first is one way to pad your bank accountby: Kimberly PalmerIf you’re like most Americans, you aren’t saving enough money. That’s a problem, because it means if unexpected costs come up – an emergency room visit, a car accident or a high air conditioning bill – they can create stress and even go unpaid. That scenario can lead to bigger problems, including escalating debt.A June survey of 1,000 adults from Bankrate.com found that 65 percent of Americans lack substantial emergency savings and 29 percent have none. That’s the first time in the survey’s five-year history that so many people have admitted to having nothing saved.“American household budgets are really tight. They haven’t been able to move the needle on savings over the past several years, and the inevitability of unplanned expenses has chipped away at what they had,” says Greg McBride, Bankrate’s chief financial analyst. It’s a huge problem, he adds, because not having money in the bank to fund a few months’ worth of expenses can keep you up at night.While historically low interest rates haven’t made it easy to grow savings parked in bank accounts, they are not the cause of Americans’ paltry savings, McBride says. Instead, he attributes it to people failing to prioritize savings by paying themselves first, through automated transfers at the beginning of the month before everyday expenses eat up entire paychecks. continue reading » 1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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