The first datum presented surprised me. Not even $1000 saved for a financial
emergency?? And that's 64%? No wonder the media can sell fear about the
"fiscal cliff."Good report, Mr. De Groote. Get them to fix
the main page headline, though: "...how to change that can be changed" ?
I didn't read the entire article but there are two things that come to mind
regarding this subject:1) Why do we have to declare intereast on
savings as income on our tax returns? Uncle Sam is placing a damper on the
practice of simple saving accounts. Tax investments, not basic safety-net
savings accounts.2) Why do financial institutions get to charge
exhorbitant interest rates on credit cards, yet for savings they play LESS than
a half of a percent? That's immoral!! (Legal, but immoral.) I guess
it's "because they can" or because it's "smart
business." (Clinton and Scrooge.)
No prudent person will put their money in savings in a climate of one-half
percent on interest and "quantitative easing" which is debasing our
currency by printing money to pay down the debt. We should be investing in
foreign currencies (Australia, N.Z., and South Africa) which have natural
resources to back their currency, gold or silver, or in food production, and/or
So too smart:Who do you suggest should set interest rates? You.
The government? Ok, maybe the market IS best...
Most people in my opinion have never felt the success of investing, largely
because they have never learned how to successfully invest. Once you have felt
the success of receiving quarterly dividends, and have seen your principle
multiply steadily over many years, the benefits of saving and wisely investing
are obvious. The best way to learn is when you are young and time is on your
side. We helped our children set up accounts to invest part of their savings in
blue chip stocks. As they have participated in the profits of these solid
companies, they have lost some of their fears of volatility that often stem from
ignorance, and have seen their savings multiply, even in tumultuous markets.
I've had a specific IRA account for the past 10 years. Each year the
interest earned is less than the account fees charged. What a GREAT savings
plan! No wonder people have little incentive to "save" when the FED
sets the interest rate at 0%. At the current CD rate of about 1 to 2 percent
return, your deposit today of $1000 will double to about $2000 in 36 to 72
years, not factoring in inflation and taxes. Consider this, with a reasonable
return rate of 6%, this same deposit would be $32,000 to $64,000 (32 times
greater or more) over the same time period.Here is another thought,
if you retired today with 1 MILLION and had it invested at current CD rates you
would have a monthly income of only about $830 to $1600 per month without
drawing down your principal.
carmanI suggest financial institutions treat their customers fairly
and give them a decent rate of return for the money they deposit. How they can
look a customer in the face and say their interest rate on savings is less than
a half of one percent, while charging 20% + or so on a credit card simply is
something I cannot understand, particularly how they can do it with a straight
face themselves. But as observed, business and ethics are exclusive
when it comes to money in almost every instance. There are exceptios, of
course, but not any that involve banking institutions.
I’m always suspicious of people who tell me how to spend my money.
I’m a thousand times more suspicious when that person is representing
business.I believe that Social Security came about as a way to delay
people’s spending to a later time in their life. Because it was a forced
delay in spending the people benefited. However I also believe that the Social
Security delay in spending has beneficial results for business. And even caused
a shift in the competition for the people’s money because old people spend
money on different things than young people. The pendulum seems to
have swung away from the safe/sure savings like Social Security toward the
gambol of having more money than you originally put away. I feel the intense
popularity and need for lotteries and ways to win are a symptom of the
frustration and lack of confidence in our economy. Rather than work and
education, success in life has better chance if you win a lottery.
@toosmartforyou: I suspect you aren't aware of how interest rates are set
on savings accounts. Banks have their hands tied by actions of the Federal
Reserve. If you want to find the villain in this story, start learning about how
the Fed manipulates interest rates and why. Be prepared to take a journey down
Save money? I'm confused. All the other experts are telling us to spend
until it hurts for the salvation of the U.S. economy. Why do these people hate
As long as Keynesians rule the monetary system, banks will never be a place for
anyone to save. Right now, the best it can offer is to help risk averse people
from losing money in the market. The Federal Reserve has robbed us of the
opportunity to enjoy a decent rate of return in savings accounts. For some
reason, they have a delusional belief that money in savings accounts just sits
and does nothing. Lowonoil is right, the "experts" want us to spend
until it hurts, and to make it possible, they've taken away all incentives
to save. We live in a world where the experts have everything upside-down and
backwards (to their own benefit, I might add).
A savings interest rate of 1% is hardly a motivator to save especially if you
have to pay taxes on it. This is a joke and a mockery. Mortgage interest is
tax-deductible, it should not be. Instead part of the principle payment should
be if we want to encourage home ownership. Long-term savings at least up to a
point should be tax-deductible, not just tax-deferred.
I saved some in the past, but have lost much of it and my retirement of $775 a
month just doesn't cover my current expenses and allow savings. House, car,
food , medications & utilities take it all and we are very conservative in
each. What do you propose we give up, maybe eating and that would eliminate the
other expenses.I received medication yesterday, 180 pills, cost
$822.37 ! With prices like that how can anyone with modest income save?
I love the opening story. It made me think of the number one thing I think that
most people spend too much money on these days... Their smart phones, Ipods,
computers and internet devices!!! Cell contracts, Monthly Data Rates, Internet,
Wi-Fi, plus all the accessories required to customize them, the cases to protect
them, the upgrades, online hosting of data and images, and all those really
cheap aps... it's all a great way to weedle away your wealth on things you
probably could do without. Makes one wonder how we survived before we had them.
I live in an area of lowincome housing, and have been in the homes
of many of them, and more often than not they have smart phones, but then they
somehow don't have the means to feed their families.
Let's face it, between the Fed and the Washington printing press our money
is worthless.Wall Street lives on a bubble of speculation.We might
as well invest in the lottery.I paid off my house 12 years ago and my
taxes are more than my mortgage used to be. And they say it will be a decade
before my house is worth what it was in 2005. We have been duped by the
When financial advisers tell you NOT to pay off your house, something is wrong.
The other thing that affects a large number of people is the lack of protection
of that home equity.Bush's changes to the bankruptcy laws made
it easier for dishonest lawyers to go after your house after a frivolous lawsuit
or outrageous medical bills. Why pay off a house if some lawyer will just see it
as a bag of gold to go after? Other than that people should own
their homes. Nothing would stimulate the economy and savings like people not
having mortgages to pay.
@raybiesLayton, UTI agree, I don't have a
smart phone, RV, ATV, and havn't been on a vacation in years, my old
computer is 5+ years old and I eun XT which still works for me. I guess it is
not as fast nor does it do some of the fancy games (which I don't have or
play). Too bad the world is not "old fashioned" like my grandkids think
I am.Government has the same problem .... Almost everyone has a
smartphone, computer 4x4 etc. whenthe world seems to have survived with
less for years. They to are victims of "need to spend" or lets have good
office furniture, I think they call it modernizing.
Saving isn't cool.
how to save money today?? Well maybe move to South Carolina and brew some
Taxes are a big reason, but not the only one.