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Thursday, April 1, 2010

No Savings? You’re Not Alone

For whatever reason, food storage seems to get all the attention when it comes to preparedness.  Perhaps some people think that if they have just enough buckets of wheat and beans, then all will be well.  In fact, preparedness is a whole lot more than full pantry shelves.  Perhaps one of the most important ways to become prepared is financially.  Sadly, too many Americans are woefully unprepared in this category, and, in fact, are lacking even in savings for their retirement.
no money 300x200 No Savings? Youre Not Aloneimage by stuartpilbrow
Jim Wang over at has this to say about where the majority of Americans stand when it comes to saving money.
CNN Money reported last week that 43% of Americans have less than $10,000 in retirement savings, which is a statistic provided by the Employee Benefit Research Institute in their Retirement Confidence Survey (2010 results). If that figure isn’t scary enough, it appears that 27% of workers have less than $1,000. Both figures are increases from 2009, when 39% had less than $10,000 and 20% had less than $1,000 a year ago.
While the statistics are sobering, it does show how much the recession has hurt a lot of people. If you lose your job, the first thing to go after your emergency fund is probably going to be your retirement savings. Keeping a roof over your head and food in your stomach is going to take precedence over retirement tomorrow.
Last year, Suze Orman stopped emphasizing the need to pay off debt, and, instead, now advises people to save first.  When a job is lost or hours cut, your primary concern is whether or not you can continue making the mortgage payment or rent.  The money in your savings account isn’t just a nice idea anymore. It now can mean the difference between having a home, or not, and getting a new job is more difficult than ever.
Jim goes on to say,
If you’re one of the ones with less than $10,000 in retirement savings, don’t despair because 43% of Americans are there with you. We’re going through some tough times now but once we get back on our feet, retirement savings has to become a priority. Social security and other entitlement programs aren’t going to be here forever. It’s only a matter of time before they are replaced as defined benefit (pension) retirement plans are being replaced with defined contribution (401k) retirement plans (Math doesn’t care which political party’s name is written on your voter card, the current system is not sustainable).
Actually, Jim is more optimistic than I am about our economy’s future. With leaders in Washington telling us we can expect double-digit unemployment for ten years or more, it’s not exactly reassuring.
If saving money seems a near impossibility, it’s time to evaluate your skills, knowledge, and experience and create new income streams.  Our economy may be sluggish, more or less depending on your location, but people still have needs, and the creative person can find ways to meet those needs regardless of what is happening on Wall Street or in Washington D.C.  Internet businesses are booming.  Ebay and Craigslist offer opportunities to earn some quick cash, and some direct sales businesses are flourishing.
Financial problems are both oppressing and depressing, and really, it doesn’t help at all knowing that others are in the same boat.  The only way to turn the corner financially is to cut out every extra expense you can and begin earning a little more.  Painful?  Yeah.  Easy?  Not really.  Worth it?  Definitely!
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