In the world of personal finance, saving is putting money away in the present for future consumption. We’ve all read about the dismal savings rates of Americans and the lack of a financial safety net and, although we have seen an annual increase in the saving rate after the dip into negative territory in 2005, we are still playing “chicken” with our financial future.
Recent research by the Corporation for Enterprise Development (CFED) shows that more than 127 million people (43.7%) in America are asset poor1 and living one paycheck away from poverty. Looking at these statistics it would seem that for the average American saving just isn’t possible. There are some organizations and programs across the U.S. looking to change that perception and help EVERYONE get ready to save.
Set a Goal, Make a Plan, Save Automatically
One such program is America Saves a national campaign that offers tools, resources and even email coaching support to help individuals and families save for a healthier financial future. This organization started in 2007 and has made great strides in generating community-wide support for increased savings for young and old alike with initiatives like America Saves Week (February 19 – 26) which is just around the corner. Here is how you can get involved:
Individuals – If you need some support to get started, you will find it with the Personal Wealth Estimator and a wealth (pun intended) of information on savings strategies and tools. With the Kick Start Your Savings tracking tool you can participate in Save Up! and receive rewards for saving and paying down debt.
Organizations (employers, groups, educators and non-profits) – There are three simple steps to get started and you will receive a resource kit with everything you need to participate in America Saves Week including sample activities, posters, flyers and presentation materials. You can even connect with national campaigns in your area.
America Saves is on a mission to help people get motivated, and get into the habit of saving by setting up automatic contributions to a savings account. Already saving? Great, then use this week to review your asset allocation and, while you are at it, review your goals to make sure that your savings projections will meet the target date you have set.
If you are already saving and have been looking for a program to help you teach your kids (or other young ones in your life) about saving, check out Family Mint. This online budgeting and tracking tool helps parents communicate the importance of financial intelligence and provides a way for kids to set financial goals and manage and track their money online.
According to the U.S. Bureau of Economic Analysis (BEA) the personal saving rate in December 2011 was 4.0% compared with 3.5% in November. Now, we know that target savings rates, just like any other “number” in our financial plan is personal and depends on many other factors. What we do know is that, before the increase in the use of credit in our society, Americans were saving at least 5% and as much as 14.6% in 19752 and now in the face of staggering consumer debt and a slow growing economy our personal savings will be crucial to our financial security.
So, join the movement and jumpstart or rejuvenate your savings during America Saves Week. Sign up, take action and help someone else you know (or someone you don’t know) begin saving for a secure financial future.
1 A household is considered asset poor if it does not have sufficient net worth (total assets minus total liabilities) to live at the poverty level for three months in the absence of income.