Americans have been tightening the reigns on their money for quite a few months now. Just a few years ago we had a NEGATIVE savings rate. You know what that means? It means we spent MORE than we earned by using credit. Now, in the midst of this economic downturn we are beginning to save again and of course it’s at the wrong time.
Last Friday, the government reported that America’s savings rate rose to 2.9%. Of course, since savings is on the increase, spending is on the decrease. Many stores have already been affected by the decreased spending and it will only get worse. Just when this country needs us to spend our money, we are hoarding it.
Personally, I would love to see our country get out of this financial mess. I don’t think this new economic stimulus plan will get us out of it. The last one sure didn’t help. However, the fact that Americans are getting a financial awakening may help us in the long run. Americans have had a tough time saving in recent years and if we learn from our mistakes, this financial crisis may be the best thing that happened to us. That is for the future. The present is a different story.
Personally, we are saving money due to our wedding in July. If we were not saving for that, we would be paying down debt.
How about you? How has your personal savings changed over the past few months?