Is the US Worth Saving ?

Discussion in 'Politics, Religion, Social Issues' started by Plutonius, Oct 9, 2016.

  1. Plutonius macrumors 603

    Plutonius

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    #1
    A report shows that nearly 70% of people in the US have less than $1000 in savings.

    The report shows that the savings rate is currently 5.7% when it was twice that 50 years ago.

    Do you feel that the savings rate is so low because people can't save or are we all chronic spenders ?
     
  2. thermodynamic Suspended

    thermodynamic

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    #2
    The US is worth saving as a country (But I sense to discrete themes in your post, LOL).

    Due to stagnant wages and higher costs, especially with pro-life care and especially for college, to save is increasingly possible.

    And with articles blaming Americans for not even spending enough, it starts to become almost insulting if the same media company owns the brands that put out both "Americans spend too much" and "Americans don't save enough" and don't go into reasonable and fair detail, instead of scapegoating the working class that happens often enough.

    When "fringe" people like Rachel Maddow spell out with near-glee about how trickle down is what some might quote as being "an epic fail", as do other sites and as more and more agencies point out the obvious, of which a web search with two key words - "stagnant wages" - start to prove...
     
  3. citizenzen macrumors 65816

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    #3
    Chronic spenders. There are too many cool things to buy, so we give into our cravings instead of saving.

    Similarly, there are so many cool things to eat, that we're overweight.

    Too much choice, not enough discipline.
     
  4. LIVEFRMNYC macrumors 603

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  5. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #5
    Well when you keep interest rates artificially low for this long it can be pretty much expected. What rate do you get for saving your money in an accessible liquid account? .02%?

    I see advertisements for high yield savings accounts that don't even cover inflation.
     
  6. Plutonius thread starter macrumors 603

    Plutonius

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    #6
    When I think of savings, I think of investments (I don't have a savings account). I'm highly diversified and I'm currently getting about 6% across my investments for the year so it's worth it to me to save rather than spend. All my investments are liquid (a few days) except for my retirement investments.

    I'm more in agreement with some of the other posters who blame Amazon and our gratification culture for our spending habits :).
     
  7. nfl46 macrumors 603

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    #7
    And eBay. Those damn eBay bucks allows me to take xx amount off, and makes me feel like I'm getting a bargain.
     
  8. Eraserhead macrumors G4

    Eraserhead

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    #8
    Investments are fine, but not for small amounts as the value can go down as well as up - so if you need them in a downturn you have an issue.
     
  9. VulchR macrumors 68020

    VulchR

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    #9
    I think personal finance should be a required part of the secondary school curriculum. I don't know about anybody else, but I knew nothing of how to handle money after high school (indeed I struggled after University). Mind you, adding this to the curriculum will never happen, because insurance brokers, bankers, and and investment firms would oppose have educated consumers.

    In any case, I don't think people are intentionally being stupid by not saving, for many people are house poor and/or burdened with other debts even if they know about savings and the financial needs of old age. Also, it is worth considering what happens when people in a country save so much that they stop spending and investing (e.g., Japan).
     
  10. LizKat macrumors 68040

    LizKat

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    #10
    Yeah, Amazon... and iTunes...

    I agree that we're a nation of spenders, not savers. Still in less well heeled tiers it's surprising that you can meet people who not only save up something towards recurring items like holiday gifts or a new washing machine but who also tithe to their church. Ten percent of low pay stashed away for anytning is indicative of some serious self discipline. But that is not the image that mass media claim that we project of ourselves in the USA.

    Our more usual image is, you know... buy this and you'll be a star like me. Not scrimp on the beans so there's enough for beans next week or a refrigerator in five years or money for the church envelopes. A lot of us apparently would rather put it all on Black Friday at Walmart, or launch day at Apple, and even then it might be accomplished by sliding plastic across the counter.

    So there's probably a ways to go before we are in danger of being like Japan, with an intergeneratational regard for setting money aside instead of spending it. Still, the beginnings of that attitude start sometime, and usually after a whole lot of people are left looking at empty cupboards. Not sure the Great Recession taught us as much as the Great Depression did about that. Time will tell when another one rolls in here. Meanwhile the use of credit soars again.

    it's not very tempting any more to save up money in day to day savings accounts at banks. Mine is just a backup in case I blow my budget and the checking account says "I don't think so" when I contemplate writing a check for the land tax or some other infrequent bill. I laugh at myself complaining when I have to build that easily available reserve back up again after hitting on it. But I'm grateful for having had the sense to put at least the company-matched 401k percentage into that plan when I landed at a corporation with good benefits. It's good to keep some money where it's not as simple as smashing a piggy bank to get your paws on it. And good to learn at least a little about investing your own money even if you entrust it to fund managers and leave most of it in tax deferred setups.

    As a young adult I did stash money religiously in a savings account though... as little as five bucks a week sometimes, knowing I could drop five bucks in the street and not notice it, but also knowing that 250 bucks plus interest at year end would be something worth having. But then interest rates had a non-zero number in front of the decimal point...
     
  11. thermodynamic Suspended

    thermodynamic

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    #11
    Investment = putting in money into an intangible object with a deluded expectation to see it grow, regardless of the cost in doing so, even if said object becomes worthless?

    Sounds a lot like gambling.

    Why do people gamble, since we are told "Do not invest what one cannot afford to lose" after being told "If you invest, 3 decades from now, you will have up to $x,xxx,xxx" in much larger print?
    --- Post Merged, Oct 9, 2016 ---
    Didn't it used to be? Why was it removed from so many schools to begin with? How can people truly plan for an increasingly unstable series of events outside their ability to control? What else is worth considering that people are not thinking of? Box. Outside. The. Think.
    --- Post Merged, Oct 9, 2016 ---
    It's your society, don't blame people for living in it in the way it's meant to be?

    and you forgot to tell people to vote in this thread too. :D
    --- Post Merged, Oct 9, 2016 ---
    It's not 1980 anymore.

    Even CDs are pointless. Not the music discy things, the "put in money and in x years it actually will be worth $xxxx".
     
  12. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #12
    Poor people can't afford to wait a few days to get access to their cash.
     
  13. Plutonius thread starter macrumors 603

    Plutonius

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    #13
    Agreed but is 70% of the population too poor to save / invest a little ?
     
  14. thekev macrumors 604

    thekev

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    #14
    It would make sense if it's taught really well. Otherwise it would just (ironically) be a waste of money.

    Those breakdowns are also financial trolling. They make the assumption that the money available at the year you retire will closely track the expected value of such an investment. It doesn't even account for short term fluctuations. If you start pulling from it during a bad year, you will have much less available. This is significant, because if older workers are laid off close to retirement, it may inadvertently turn into a slightly early retirement at a very bad time.

    The article is a troll study. It assumes that they have a savings account, which has become a completely useless thing. You could just keep it in your checking account or invested. Why would you want to have money in a savings account that pays 0.2%. Even at compound rates, with the potential for bank fee liabilities on lower amounts, it doesn't seem sensible.

     
  15. Snoopy4 macrumors 6502a

    Snoopy4

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    #15
    Anybody can save money. People choose not to.
     
  16. Fancuku macrumors 6502a

    Fancuku

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    #16
    I was talking to my brother-in-law yesterday about this. My sister and he bought a bigger house for their growing family and are trying to rent the first house they bought. This is the DC area where many couples make 150+k a year. They had 7 people wanting to rent their house but all of them have bad credit even though all made 150+k a year. No one could come up with a $3,000 deposit either.

    I don't get it. My parents came to the US when they were in their early fifties. They have been here 18 years, never had a job that paid more than 30k a year, yet they have already paid off the 250k mortgage they took in 2002 to buy their home.
    --- Post Merged, Oct 9, 2016 ---
    I agree with the bold.
     
  17. thermodynamic Suspended

    thermodynamic

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    #17
    Why invest? Unless they were born in 2010 and don't believe the years 1987, 2007, and others exist? Or thye know enough not to gamble?

    Why save when your value isn't enough to be able to save and do something every so tiny like "make ends meet".

    So many people out of touch, it's sad.
     
  18. thekev macrumors 604

    thekev

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    #18
    As I mentioned, they seem to be using a very literal definition here. If the person doesn't have something which is specifically a "savings account" as their bank, they appear to be under the not a dime heading. These surveys are sometimes portrayed in a dishonest manner, which is how I interpreted this one.
     
  19. Dagless macrumors Core

    Dagless

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  20. smallcoffee macrumors 6502a

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    #20
    We should start by no longer ever referring to Americans as "the American consumer". We have a huge problem in this country with people buying cheap crap without realizing the benefits of buying something that's built to last.

    On the other hand, at some point having a bunch of savings is kind of not a good use of your money. After you reach, say, a 6 month runway if you lost your job, the rest of your money should be spent or invested to generated a better return. Savings sitting in the bank is just losing you money.
     
  21. LizKat macrumors 68040

    LizKat

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    #21
    I know --and I do know, because I have worked at a food bank and otherwise observed bone-cut poverty-- but for those of us who have a job and money coming in, then we can usually choose, if we will, to not spend every last dime the way someone at sub-poverty line often enough does have to do (and still come up short).

    When I wasn't working once, for about four months, I hung out with a guy who also was not working and who was a lot more attuned to not having current income than I was. We were walking up some avenue one afternoon when I saw a shop with coffee mugs and stuff, artisan-made, in the window. I pointed at a mug and said I might go in and buy it since I really needed a new coffee mug.

    He looked at me, actually put his hand on my arm to deter my store entry, and said "you know if you really need something to drink coffee out of you can use an empty peanut butter jar." I think about that now and then when buying standard commercial peanut butter now, which all comes in plastic... but his point was made, and stuck in my head.

    So I'm not buying coffee mugs i don't need. I can't help thinking a lot of us in the USA could set a little something aside now and then. It's not right that 70% of us have nothing past what's in the next paycheck. That's not the economy. That's us being the proverbial grasshoppers instead of ants.

    (ok ok, iTunes is another story.... when you want to discuss an iTunes jones, let me know)
     
  22. Snoopy4 macrumors 6502a

    Snoopy4

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    #22
    I call it the debit card effect. People are no longer required to actually sit down and work with their finances anymore. Basic accounting isn't even a school requirement anymore. It's wrecking the country.
     
  23. A.Goldberg macrumors 68000

    A.Goldberg

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    #23
    This really isn't new news. The complete lack of Americans saving money has been going on for a very long time. Looking at both savings accounts and 401k amounts are dreadfully low. Most people don't have pensions anymore. Then consider how little money Social Security pays out and the crash course it's currently on. All I can say is big problems are looming in the future.

    Savings banks interest rates are a joke. Having diversified but safe investments is probably your best bet to keep up with inflation. I suppose Americans have the benefit of owning their own homes, which isn't necessarily as common in other countries.

    People can easily decide when and where to save, but it seems many people would rather not. I understand it's not an easy thing to do.

    ---

    When I was in high school, almost a decade ago I was required to take "personal financial management"- which introduced topics like banking, credit/loans, taxes, investments, etc. I too think this should be a requirement of all students.
     
  24. shinji macrumors 65816

    shinji

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    #24
    Well, this is MacRumors. I don't think there's a better example of chronic spending than this place every time a new Apple product is released. :)
     
  25. fitshaced macrumors 68000

    fitshaced

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    #25
    The sad reality is that we need money so much. We're slaves to the dollar and dollars bring temptation. But, as this is the world we live in and we must conform to accumulating as much wealth as we can in case we live to 115, there should be much more regulation in finance. Maybe we even need regulation in how we spend our money so that children don't go unfed or pensioners don't struggle in old age.

    But at a minimum there should be mandatory schooling in personal finance and how to manage wages. In Australia, there is a mandatory 9.5% salary payment to a pension fund. This is good and bad. Good that it forces people to save for retirement, bad that it has been heavily fed onto the stock market which destroyed many people's retirement wealth 8 years ago. There are self managed funds now but there should be an option to stick in far safer investment methods as well as not lowering interest rates to ridiculously low rates which seem to aid property investors more than anyone else.
     

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