Consumers looking for money now are joining forces. The country just celebrated its annual “America Saves Week“, which is an event that encourages consumers to start saving money. The initiative came together as a result of depressing statistics brought about by the recession.
Consumers are Encouraged to Continue Saving
In the past, economists encouraged consumers to maintain cash reserves of two to three months of monthly expenses. Then the economic downturn happened and people who had the recommended three-month’s worth of savings went through it quickly. Millions of people were laid off and realized just how small an amount that really was to fall back on.
Now that the recession is over, more and more groups are cropping up and encouraging Americans to once again start saving. In case of disaster, or continued economic stressors, people need to have the funds to maintain their bills. One of the biggest problems with this past recession was that in addition to economic hardships, jobs were eliminated in mass numbers. Even the most qualified consumers were unable to find jobs immediately and spent months, even years, searching for employment.
“America Saves Week”
The “America Saves Week” is one event that is proving how important it is for people to save their cash. Fortunately, a record number of people are listening. A recent Gallup poll showed that 62% of Americans say they enjoy saving now more than they enjoy spending. In 2006, that number was only 50%. Americans also realize that their newfound saving plans are quickly becoming the “new normal.” Families that cut back during the recession are continuing their frugality and hoping to increase savings and pay down debt.
Debt post recession
Americans realize that debt is bad. Though for many years debt has been thought of as a convenient tool, borrowers are now realizing that it comes with a price. Currently, it isn’t uncommon for credit card companies to charge hefty fees, along with double-digit interest rates for the cost of extending credit. And if a consumer’s credit score is low, expect both to increase considerably. Because of the changing face of credit, finding money now is crucial to keeping up with bills. Consumers know that they need to shore up their nest eggs if they are to pay for bills and forgo all the issues credit brings.
Changes in Managing Finances
The way Americans are handing debt is also changing. They are trying to pay down debt, and they are also trying to manage finances wisely. For example, the Gallup poll also showed that more and more people are trying to round up their mortgage payments in an effort to pay off the loan sooner. For example, on a $200,000 loan, at 6% interest for 30 years, the payment is about $1,240. Rounding up to a $1,300 payment monthly shaves about $24,000 off the total loan. Americans are jumping on the “rounding up” bandwagon and using it to their advantage.
Focusing on the financial future
In the end, saving is a big responsibility for every consumer to take on. With people stressed financially, it can be difficult to initiate a new budget. For consumers who are determined to find money now though, it can pay off in the future. Paying down debt and then managing money wisely can save long-term funds for any wise American.