Why Can't Americans Save a Dime?

[peejay 327]

Why can't Americans save a dime?

Remember when credit was just for homes and cars? For the first time since the Great Depression, Americans’ savings rate has been negative for a year.

Americans' long journey on that road to debt began gradually after World War II. "Baby boomers' parents had access to credit, but in a responsible way, using it to buy durable goods -- a house, a car, a washing machine," says Shira Boss, author of "Green With Envy: Why Keeping Up With the Joneses Is Keeping Us in Debt,” to be published in May. "As baby-boomers grew up, they gradually started to see debt not as a way to get these durable goods but as a way to increase their lifestyle. They started sacrificing any future security for present-day comfort and entertainment."

In 1981, Boss says, families saved an average of 11% and owed 4% of their income on credit cards. By 2000, the average savings rate had already fallen below zero, and credit-card debt had gone up to 12% of income. Today, she says, "boomers have a bigger problem with debt than anyone else. Half of them do not have a retirement account."

For consumers as a whole, Boss sees a collective psychology prevailing. "We ask, 'What are others doing, and what can I get for myself?' Nobody wants to admit that there's anybody they're keeping up with, but we do collectively keep up with one another."

Financial experts cite varied reasons for the lack of savings. Some are economic. Average weekly earnings decreased by 0.4% in 2005, according to the Bureau of Labor Statistics. Housing, healthcare, and education costs have skyrocketed.

Other reasons are cultural and attitudinal. "People don't remember the Depression," says Lewis Mandell, professor of finance at the University at Buffalo School of Management in New York. "People who are younger just really believe that nothing bad can happen to them. Either they think Social Security is going to be there for them when they retire, or they may feel that the government will never let them starve."

That spending often marks a generational shift. "What our parents saw as luxuries, people our age see as little indulgences," Davis says. "My mother would never spend $5 on a coffee. Some people do this every day." She adds, "My parents are appalled at the way I justify my spending. I think, 'Why work and make money unless you're going to enjoy it?' That's a fine theory until you're 60, homeless, and with no money in the bank."

Here is the entire article: http://moneycentral.msn.com/content/Saving...75.asp?GT1=7925

I've been a saver all my life and carry very little debt. I see some of my friends that are 50 years old, in debt up to their eyeballs, and have zero saved for retirement. And they make the same money as me!

What's in your wallet!

[Hilarious Clinton 452]

Because everything we don't need is always on sale. Thank you Walmart.

[w¡n9Nµ7 §£@¥€r 123]

Two credit cards and a debit card. I pay off both credit cards in full regularly. I used to save a lot before I got married. Savings have tapered off now.

[john_and_marlene 162]

Two credit cards and a debit card. I pay off both credit cards in full regularly. I used to save a lot before I got married. Savings have tapered off now.

I had a hard time saving until I got married. Savings are increasing now.

[irishgirl73 0]

Because everything we don't need is always on sale. Thank you Walmart.

Don't exclude target

[w¡n9Nµ7 §£@¥€r 123]

Two credit cards and a debit card. I pay off both credit cards in full regularly. I used to save a lot before I got married. Savings have tapered off now.

I had a hard time saving until I got married. Savings are increasing now.

That's interesting.

[m_and_m20 0]

Im only 23 and ive got so much debt its unbelievable! with credit cards, student loans, furniture loan, car loan, hospital bills, it just seems neverending!!!

Has anyone else been watching the oprah special shes got going on about debt?? the Debt Diet! and I thought I was bad..... How can you make over $100,000 a year and be over $200,000 in debt??? If me and my husband made half of that, we would be out of debt in a year!

My husband is definately the saver between the two of us! Not that i dont want to save, but I would like to pay as much off as i can before saving. My husband has the opposite approach, save as much as possible out of every check and put less toward bills......

[Bootylicious!! 2]

One word: Immigration. We had plenty of money saved before Javier was out of work for 6 months. Plus all the fees and trips to Mexico to see him while he was there. Maybe since he is back we can get caught up again.

[faith 0]

One of the problems is that teenagers are offered credit when they have little or no clue how to handle it. They end up with huge debt by the time they get married and then it's a cycle they can't get out of.

[w¡n9Nµ7 §£@¥€r 123]

One of the problems is that teenagers are offered credit when they have little or no clue how to handle it. They end up with huge debt by the time they get married and then it's a cycle they can't get out of.

Yup, a friend of mine, 26 year old female, close to 80,000 bucks in credit card debt.

[Miranda&James 8]

One of the problems is that teenagers are offered credit when they have little or no clue how to handle it. They end up with huge debt by the time they get married and then it's a cycle they can't get out of.

I saw that happen to my brother so I've never gotten a credit card. My only debt is my student loans (but I'm not out of college yet). The way I see it, I have to be in debt with that money right now, it's my only way to survive, and I certainly won't be the first person paying off student debt, but then again so many people have done it so I know I can too. I need the degree for a good job so this is my sacrifice for it!

[faith 0]

One of the problems is that teenagers are offered credit when they have little or no clue how to handle it. They end up with huge debt by the time they get married and then it's a cycle they can't get out of.

Yup, a friend of mine, 26 year old female, close to 80,000 bucks in credit card debt.

Holy #######! I can't imagine having that much debt. As I've said before, we don't have credit cards, just my car loan and the usual monthly bills. It just seems to work better for me that way.

[Traviesa 0]

One word: Immigration. We had plenty of money saved before Javier was out of work for 6 months. Plus all the fees and trips to Mexico to see him while he was there. Maybe since he is back we can get caught up again.

With all the fees and since I'm now addicted to visiting Mexico, it's getting quite hairy in the financial department. I have 3 maxed out credit cards, a negative balance in checking, and no savings. I really need my Javy to come home soon!!

[w¡n9Nµ7 §£@¥€r 123]

Holy #######! I can't imagine having that much debt. As I've said before, we don't have credit cards, just my car loan and the usual monthly bills. It just seems to work better for me that way.

Yeah me neither. My only debt is on an interest-free furniture loan and my mortgage. Pretty soon I'll be buying us a second car and I may finance part of that too.

I like having credit cards though. I like the cashback and the miles

[m_and_m20 0]

One of the problems is that teenagers are offered credit when they have little or no clue how to handle it. They end up with huge debt by the time they get married and then it's a cycle they can't get out of.

*raises hand sheepishly*

thats me......

havent used a credit card in quite awhile though, sorta proud of that. Now the mentality is if i dont have the money, i dont need it, or ask the husband to buy it for me! , dont do that often, but he usually has more extra money in his pocket than i do (again, being the saver that he is!)