Save America

A TIME article is reporting on new figuring revealing that the 2006 personal savings rate at was at a 74 year low. That's right kids, do the math. That means us Americans are saving the same percentage of our salary today as our grandparents' families did during the Great Depression.
We're the wealthiest country in the world, and yet we spend all we make -- and more!
The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.
So what's the problem? Why are Americans unable to save? In the '30's, the savings rate was negative because the unemployment rate was 25% and people needed to afford food. Now, the unemployment rate is very low, and we're spending all we make, then buying iPods and Wiis on credit.

With the obvious peer pressure to live above our means, what're we to do? Josh & I have decided to live below our means on purpose. We stick to a budget. When we go house shopping, we look at houses below our means- and definitely well below the average house price around these parts. And, honestly, I'm happier to have it this way. There's a freedom in saying No to things. Saying Yes to them doesn't bring freedom, in my experience, but instead weighs me down- not only do I have the burden of paying for the things I say Yes to, I have to store them, keep them in working order, or consume them. Living below my means with my needs met is really freeing.

This is my prayer:
Keep falsehood and lies far from me;
give me neither poverty nor riches,
but give me only my daily bread.
Otherwise, I may have too much and disown you
and say, 'Who is the LORD ?'
Or I may become poor and steal,
and so dishonor the name of my God.

Proverbs 30:8-9


Beth @ The Natural Mommy said...

Oh, I love those verses from Proverbs! I don't know that I've ever read them before. Are they NIV? I need to tatoo them to my hand and forehead and write them on my door. :-P

ashley said...

Very interesting, and a little sad. We were talking about this last night with my women's fellowship group at church. I think a large problem is the mentality of our generation (or so I've observed) is you have to live at the same level as your parents did when you left home - cable TV, new car, owning a house. In addition to all that, they want to be able to party on the town which is a very expensive habit.

Joanna said...

See, the article talks about how this isn't uniquely our generation's problem. Yes, young people are spending more than they should, and are graduating with more school debt than ever before, but the scary part is, our parents- the baby boomers- also have this -1% savings rate. They're supposed to be getting ready to retire by saving, so they can stop working, and they're spending their savings instead. At this rate, some won't ever be able to retire. That's the scary part. It's our generation that's going to have the burden of caring for the aging population. Other countries face this dilemma as well, in Europe and Japan, where the birth rate is even lower (but the savings rate is higher).


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