The average American family is struggling with savings. While as much as 70% of people agree that the economy is humming along at a record pace, many people often do not see the real benefit that Wall Street is reaping in their own bank accounts. Here in the United States, the economy may be doing well but the savings rate reaches has reached a new low.
A recent study by the Federal Reserve says that the average American consumer is unable to cover a $400 emergency expense without tapping credit or having to sell some possessions. Many attribute this to the rising cost of living and the recent uptick in consumer debt and student loan debt which are both having a negative effect on the savings rate. Student loan debt in America now tops 1.4 Trillion dollars and is causing many people to not be able to purchase homes and cars and is even blamed for delaying marriages and keeping people from starting families.
Another disturbing trend in the savings rate in America is the fact that more than 50% of people have less than 1,000 dollars in savings. Despite the fact that more Americans are feeling confident in the economy, a full 57% of Americans don’t even have 1,000 dollars saved. This is disturbing because many people still expect to retire at or around 65. The average social security check people receive in retirement is approximately 1,400 per month. While that will continue to increase as time goes on, it is a sobering thought that many people who are late to get into the savings game may have to finance their retirement on just under 17,000 dollars per year.
As we stated earlier, most people are feeling more financially secure but they are failing to save. You can make that savings easier if you contribute to employer funded or matched retirement plans which save your money for you, keeping you from ever getting your hands on it. If you work for an employer that does this, we highly recommend you using this. If you are having to save on your own and you keep finding it harder and harder to put money away you may be a good candidate for bankruptcy. Bankruptcy can be a positive thing for your finances and it can help you eliminate may of the unnecessary debts that are holding you back from creating a savings plan. If you are struggling with creating a savings plan, give us a call. The attorneys at Harmon and Gorove have decades of experience helping people out of debt and making meaningful financial changes in their lives.