Program aims to help Utahns save

A generation ago, you couldn't find "zero-down" mortgages or car payments that devoured half of a person's disposable income.

But that was before the late 1970s, when deregulation of the banking industry resulted in easy credit and high-interest-rate loans.

Since that time, Americans have sunk deeper into debt while putting aside less money in savings.

On Wednesday, United Ways of Utah launched a new initiative aimed at reducing debt and increasing personal savings. The program already has enrolled 420 people, with average individual savings amounting to $114 a month.

"As we all know, it's a spend, spend, spend society," said Deborah Bayle Nielsen, president of United Way of Salt Lake. "The No. 1 core issue affecting families in our community is insufficient income. An alarming number of middle-income families live paycheck to paycheck, just one life event away from financial catastrophe."

The story is being played out across the United States.

According to the Federal Reserve Bank of St. Louis, in 1982 Americans saved 8.2 percent of their income, a 37-year high. But by 2004, the personal savings rate had dropped to 0.9 percent.

While personal savings rates have plummeted, consumer debt has skyrocketed.

The Federal Reserve earlier this month reported that consumer credit rose at an annual rate of 3.25 percent in the third quarter. Revolving debt, or credit card debt, totaled $801.5 billion at the end of September, an 18 percent increase since 2000.

"We've gotten out of the habit of paying ourselves first," said Bill Crim, director of United Ways of Utah. "We need to start reversing the trends in Utah that have us at the top of the nation's bankruptcy rates and the nation's foreclosure rates.

"The real problem really is in the middle-income areas, people who have enough discretionary income but are getting squeezed with higher housing costs and higher health-care costs. It's the problem of just not thinking that we can save."

More than 80 million Americans owe money on a credit card, with the average family that carries a balance now owing more than two months of income on their cards, according to Harvard Law School professor Elizabeth Warren.

"My golden retriever got an application for a credit card," said Sen. Ed Mayne, D-West Valley. "It came in the mail with his name. I didn't know if they wanted a signature or a paw print."