I was chatting with some fellow personal finance bloggers about why the U.S. savings rate is next to nothing. Here’s what came of it.
Henry @ Binary Dollar: I don’t even know what the savings rate is
Jeremy @ GenXFinance: I think it comes down to a lack of financial education. There is big shift in how the last few generations view finances.
Henry @ Binary Dollar: I just know it’s ridiculously low
Tricia @ Blogging Away Debt: I believe it’s in the negative at the moment.
Henry @ Binary Dollar: I don’t think it’s financial education
Jeremy @ GenXFinance: most of our parents (baby boomers) grew up with cash only parents
Jeremy @ GenXFinance: only later in life they were exposed to credit and disappearing pensions
Henry @ Binary Dollar: heh. I have no idea why people don’t save.
Henry @ Binary Dollar: everyone KNOWS what they need to know already
Tricia @ Blogging Away Debt: I think there is a general attitude of wanting things now. With the increased media presense, we see more things that we “could” have.
Jeremy @ GenXFinance: we’ve moved from generations who didn’t need to save because of the financial security they were entitled to via social security
Jeremy @ GenXFinance: and pensions
Jeremy @ GenXFinance: oh there is, for sure
Jeremy @ GenXFinance: everyone wants wants wants, and will do whatever they can to get it
Tricia @ Blogging Away Debt: I am not counting on social security, that’s for sure.
Henry @ Binary Dollar: me neither
Henry @ Binary Dollar: I want things too but that’s why I’m saving
Henry @ Binary Dollar: so I can BUY all that crap
Tricia @ Blogging Away Debt: But it’s so much easier to put it on credit and have it now.
Tricia @ Blogging Away Debt: <– guilty of that
Jeremy @ GenXFinance: but I think the root of the problem comes from the major shift from the current retired generation who are living on the government or their employer’s dime
Jeremy @ GenXFinance: to one where it is up to us to fend for ourselves….
Jeremy @ GenXFinance: we haven’t bridged the gap yet
Henry @ Binary Dollar: and it’s not just retirement
Henry @ Binary Dollar: people don’t even save for their splurges. they buy motorcyles on loans and stuff.
Jeremy @ GenXFinance: no it isn’t, but that is the most important and basic need that should be considered when saving
Jeremy @ GenXFinance: that’s true
Henry @ Binary Dollar: when did you finally realize that you better start getting out of debt and saving trish?
Henry @ Binary Dollar: call the hospital. she might have fainted or something
Tricia @ Blogging Away Debt: When my credit cards were almost maxed out. Very fortunate for us, I found a new job that paid more right before I used all available credit.
Tricia @ Blogging Away Debt: We kept living the way we were, and had a surplus. All extra money goes towards the debt.
Tricia @ Blogging Away Debt: Now, I’m not so sure we can save at the same rate that we are paying off debt.
Tricia @ Blogging Away Debt: It is going to be harder to do.
Tricia @ Blogging Away Debt: I can already feel the need to “spend” and “live life a little” once our debt is paid off.
Henry @ Binary Dollar: okay I just looked it up
Henry @ Binary Dollar: Personal savings drop to a 73-year low
Jeremy @ GenXFinance: that is a sad picture
Henry @ Binary Dollar: I know
Henry @ Binary Dollar: dangit I hate gaim
Henry @ Binary Dollar: it changes my font sometimes
Jeremy @ GenXFinance: make sure you publish that
Tricia @ Blogging Away Debt: LOL
Henry @ Binary Dollar: okay. final thoughts on fixing the united states savings rate
Tricia @ Blogging Away Debt: Education.
Tricia @ Blogging Away Debt: Start young.
Jeremy @ GenXFinance: as adults, all we can do is address our debt first and then focus on savings. For our kids, teaching them to operate on a pay-as-you-go system
Jeremy @ GenXFinance: and lead by example
Henry @ Binary Dollar: I’d make a credit card harder to get.
Jeremy @ GenXFinance: I agree, unfortunately that is out of our control for the most part
Jeremy @ GenXFinance: that would be the best solution
We talked about some other topics that I’ll post in the future. If you want to chat and show up in future posts, add my name on AIM: bickbot.
Hat tip to Blogging Away Debt and GenXFinance.