Americans: Jesus saves !! (Why don't you?)

[Rik Meleet]

The graph below shows that Americans have a negative savings rate. Americans: you are negative savers; meaning you withdraw more from your savings account than you save. Why on earth don't you save money for times when you need it?

For comparison: in March 2008 in average each Dutch citizen has about 15k Euro in his savingsaccount. That doesn't include the financial reserves of companies.

So, please tell me: why don't Americans save money ?


U.S. Net Savings Rates (Household)


Inspired by this post

Spoiler :

(..)The real problem, actually, is not credit, it's savings. From what I've noticed, Americans are extremely poor savers, and as such I can definitely see people needing to buy that $50 medicine with their credit card because they don't have that much on their checking accounts. And I'm not talking about dirt-poor people, I'm talking about the average guy. (..)

Actually Americans have now negative overall savings

http://www.swivel.com/graphs/show/11298674(..)

 

[skadistic]

Who needs to save? Why bother with responsibility?

 

[Bigfoot3814]

Well, we gotta buy . .. .. .. .!



Really though, it's because people are used to a thriving economy and frivilous spending. People still feel like they need overseas vacations and other expensive things. I figure eventually people will get back to reality sooner or later.

 

[Marsden]

I don't know why, I try to save money, however earning a .5% interest rate in a savings account is tantamount to losing money, especially when a person has credit card debt with a 8, 12, or even 23% interest rate. To phrase it differently, if you have $100 and a choice of saving it and earing a cool nickel (that's 5 cents) or paying down $100 of a debt and potentially not paying $1.20 or more intrest because of it then I can see why someone might not save the money.

Also, I've been told, and maybe this is wrong but, it slows the economy by saving, IOW not having that money out passing around sitting in an account. I'm not at all sure that's true, but I'm sure that's what I was led to believe, and probably what other people in a over commercialized, consumerism culture are told.

 

[downtown]

Its pretty hard when you don't make much money. I dont even have a savings account. I give myself a monthly allowance, and keep the rest of my money tucked away to work on paying down loans, or for emergencies, which happen. I only know one of my peers (under 25ers) who has much of a savings, and most of that was an accout he got from his folks.

Its differente for every age group. For young Americans, I think a big reason we suck as savings is because we have to incur a *lot* of expenses to get an education, so paying that off becomes priority one. That, and a total lack of finaincal awarenes.

 

[Bigfoot3814]

Also, I've been told, and maybe this is wrong but, it slows the economy by saving, IOW not having that money out passing around sitting in an account. I'm not at all sure that's true, but I'm sure that's what I was led to believe, and probably what other people in a over commercialized, consumerism culture are told.

Both of those things are true. The government handed out those stimulus checks hoping people would spend the money. As I said before, people just feel a need to spend their money all the time.

 

[JollyRoger]

It is unpatriotic to save. If you don't spend, the terrorists win.

 

[skadistic]

I had a home-ec class in 7th grade that went over personal finances. Do they have those in public schools?

 

[Red Door]

I had a home-ec class in 7th grade that went over personal finances. Do they have those in public schools?

They did in my public middle school.

 

[Eran of Arcadia]

Even though my spendings increased noticeably in the last few months, I am still saving more than I spend.

 

[joycem10]

Jesus may save but Moses invests.

Take $50 a paycheck and drop it in a mutual fund.

Take full advantage of employer matches on 401(k)s. I know alot of people who leave 1-2% of their salary on the table because they dont contribute to the employer match limit.

 

[RedRalph]

Saving, along with sharing, are filthy communist ideals. dont fall victim to the red manace, kids

 

[Rik Meleet]

Also, I've been told, and maybe this is wrong but, it slows the economy by saving, IOW not having that money out passing around sitting in an account. I'm not at all sure that's true, but I'm sure that's what I was led to believe, and probably what other people in a over commercialized, consumerism culture are told.

Both of those things are true. The government handed out those stimulus checks hoping people would spend the money. As I said before, people just feel a need to spend their money all the time.

Yes, both are true, but there are other mechanisms in it simultaneously. If everyone spends and spends and doesn't save, but you do, you get the profit from the economy, but also the profit from saving. Something that is good for the economy doesn't mean it is automatically the best for you personally. Very often doing the opposite of what the majority does is optimum. Think of the [wiki]Prisoner's dilemma[/wiki] where the optimum for the economy is both denying, but optimum for you is betraying your friend while he doesn't betray you.

Also that "spending is good for the economy" mantra stops being good when, despite spending like there's no tomorrow, there suddenly is a tomorrow and you need money while you have none since you spend it all.

 

[Bamspeedy]

It's the 'keeping up with the Joneses' mentality. Too many just have to have the coolest, biggest, latest gadgets and gizmos, live more extravagently than they should, etc to feed their egos, regardless if they can 'afford' it or 'need' it, and just charge it to a credit card to worry about paying it later.

 

[skadistic]

Its the same mentality that has people with cable TV, high speed internets and fashionable cloth but no health insurance. Priorities in America suck. It doesn't help when the government is all to eager to bail people out for their unwise spending.

 

[Masquerouge]

Well one very important thing to mention is that the negative savings rate is very recent. The downward trend started in the mid-80's, so it's not a cultural thing, rather a new phenomenon.

My personal opinion is to blame the huge credit boom. While they now seem a staple of the American life, credit cards and credit debts had once a very bad reputation.

 

[Marsden]

It's the 'keeping up with the Joneses' mentality. Too many just have to have the coolest, biggest, latest gadgets and gizmos, live more extravagently than they should, etc to feed their egos, regardless if they can 'afford' it or 'need' it, and just charge it to a credit card to worry about paying it later.

Indeed, and this is encouraged by advertisers and starts when we are children, from toys to breakfast cereals, we are constantly bombarded with advertisments. Even now as I type there's ads above and below on this screen. I'm not against capitalism, but rampant profiteering dictates more, more, more. Stockholders want bigger profits and growth. If a company does try to stay "within reason" and say doesn't try to saturate the market for maximum profits a competitor will show up to under cut them so there is no simple "conscientious" answer that some people like to pretend there is. Economies are like beasts, they act of their own accord. Advertisers are hired by companies that need to sell more products in order to maintain growth and margins. You don't see many ads that say "keep your money and save it for when you need it."

 

[Fifty]

So, please tell me: why don't Americans save money ?

Because, unlike Europeans, Americans are pretty much all idiots. Unlike Europeans, we don't have any fiscal responsibility. Unlike Europeans, most Americans don't even know how to do simple financial math, because unlike europeans, most Americans are born stupid (from all the chemicals that we have in our food, unlike in Europe), and if they aren't born stupid then we go through our horrible public school system (unlike in Europe, Americans don't care about education). Unlike Europeans, we'd rather eat 20 big macs and drive SUVs all day than save money. Unlike Europeans, we have to pay for EVERYTHING because our fascist government (elected becuase we're all stupid) doesn't give us any social programs. Unlike Europeans, we're tricked into donating our savings to churches anyways, because unlike Europeans, Americans are all stupid sheep who believe they will go to hell if they don't donate to evangelical christian groups. Unlike Europeans, Americans are incapable of appreciating the finer things in life. Unlike Europeans, we don't understand how to have fun if we aren't spending money (and unlike Europeans, when we do spend money, we don't spend it on fine food and art and books, but rather on violent video games and big macs). Unlike Europeans, we're addicted to spending all our money at the gas pump, because unlike Europeans, we're too stupid and lazy to use public transportation. Unlike Europeans, we have no ability to look towards the future, because unlike Europeans we pretty much all believe that the rapture/apocalypse is going to happen very very soon, so we have no reason to save money.

Please don't blame us Rik, we're just a bunch of lazy idiots. We're all so stupid... please teach us your European ways!

 

[Eran of Arcadia]

You pretty much just summarized half of CFC . . .

 

[pau17]

America is the consumer of last resort. Since the dollar is the reserve currency, it is much easier for America to have a low savings rate because everyone else in the world has to hold dollars in reserves to back their currency and they have a supply to lend America. That means a lot of purchasing power is locked away because everyone is holding dollars, and America gets cheap loans in order to make up for the gap. But what happens is that the increasing deficit eventually brings the dollar back down, which is the problem with being a reserve currency. The same thing is starting to happen to the euro, as people hoard reserves of euros...