The Real Reason Americans Struggle to Save
The economy has been slow to recover from the recession that technically ended in 2009. Wages have remained stagnant as housing costs have risen and interest rates for savings accounts have fallen.But we can't put all the blame for our bleak financial situations on the economy, new studies indicate -- we, too, are at fault.Take our freeonline course on:Timing Your SpendingStart Now View all Courses Twenty percent of Americans spend beyond their means, according to the "Report on the Economic Well-Being of U.S. Households in 2014," which the Federal Reserve released this month. The report is based on the Fed's second annual "Survey of Household Economics and Decisionmaking," which was conducted in October.A SunTrust Banks (STI) study suggests that one factor -- excessive lifestyle spending -- is primarily responsible for our inability to get ahead financially.Even among households that earn at least $75,000 a year, the study found, nearly one-third were living paycheck to paycheck at least sometimes, and 44 percent (rising to 71 percent among millennials with the same household income) cited lifestyle spending as the reason they saved less money than they should.Eating out, for example, was the No. 1 type of lifestyle spending cited by respondents.One-third of people polled by SunTrust said their lack of financial discipline has held them back from achieving their goals.Good and Bad NewsPerhaps unsurprisingly, the Fed's report reflects as much bad news as good news about how the economy and our own spending habits have impacted our financial well-being over the past 18 months.The Fed's survey questions are designed to gauge individuals' financial well-being and monitor their recovery from the recession. Topic areas include housing, retirement planning, access to credit and more.Key findings include the following:Economic fragility: The good news is that less than one-quarter of respondents said they or a relative they live with had experienced a financial hardship in the prior year. However, the bad news is that 47 percent said they couldn't cover a $400 emergency expense without selling something or borrowing money.Savings and spending: 63 percent of respondents said they saved some money the prior year, but 20 percent said their spending exceeded their income.Banking and credit: 56 percent of respondents with at least one credit card said they always paid the bill in full the prior year. About one-third of respondents who had applied for credit in the prior year said they were turned down or given less credit than they requested.Retirement: This is pretty much all bad news. Among people who had yet to retire: http://www.dailyfinance.com/2015/06/05/reason-americans-struggle-to-save/?ncid=txtlnkusaolp00000058
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Freshman Silent
jennilee
9 years ago
Living within one's means is an antiquated idea. Saving for the future also. No one is guaranteed a certain standard of living, we cannot blame big corporations or the government for people's irresponsibility.
Senior Guide
seeder
XXJefferson51
9 years ago
The profit motive is not the issue here. Living within our means and saving for a rainy day is.
Senior Guide
seeder
XXJefferson51
9 years ago
More than half of American households make over 30k a year. Two spouses making federal minimum wage make about that. One full time 15.00 an hour job or two 7.50 an hour x 2000 hours. While that's not optimal for anyone, it's not half the U.S. Either.
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