We have turned over a new leaf as a country when it comes to saving. I believe the change is a permanent one, not a temporary thing.
We are learning to save again and are at the point where the average savings rate for Americans is about a nickel out of every dollar, give or take a little. That’s a big improvement from where we were at the peak of the living large days when Americans might spend $1.01 for every dollar they earned. So step by step, we’re crawling our way out.
In terms of the unemployment rate, we won’t be able to save more as a nation until more people have gainful employment.
But for those who are working right now, a study from consulting firm Mercer shows people are increasing the percent of pay saved in their 401(k) plans at work. Some forty odd percent of workers are saving more in their employer-provided retirement plans this year than a year ago.
Where is that newfound zest for saving coming from? It’s coming from insecurity!
Just under half of people fear they’ll lose their job, according to the Mercer study. In addition, almost half of workers expect to delay retirement in order to be able to have enough security during their retirement years.
In my mind, this all points to a recognition that we as individuals have to do more to prepare ourselves for rainy days. I don’t want you to have to live in fear that you’ll be called in on a Friday and summarily dismissed.
So how do you reduce that level of anxiety? Spend less than you make. Saving makes all the difference in your future.
Editor’s note: This segment originally aired Oct. 21, 2011.