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We as Americans love to spend money and show off what we have.
But as we continue to spend money and show off what we have we forget to save.
So as Americans are we in a savings crisis?
I would like to say no. We are Americans we live in the land of the free and make more money than a lot of other countries.
But the sad part is yes we are in a savings crisis. We don’t save.
We don’t save to buy new cars, new houses, or even retirement. We just get a loan and go deeper into debt.
Some friends of mine work in the Real Estate business. Several times they have stated that it shocks them how many people answer “nothing” when they ask “how much savings do you have to put down on a house?”
How scary is that to hear. You are about to make the biggest purchase of your life and you have nothing to put down.
To top that according to Nerdwallet in 2016 the average American household owes $135,924 including their mortgage. So Americans are just adding debt on top of debt.
So what can you do about it?
Invest in your 401K
You can start saving by contributing to your 401k plan if it is offered through your job. A lot of people don’t participate in these plans because they are in debt. But you are giving away free money especially if your employer matches it.
Open a Savings Account and Auto-Save $20 Per Paycheck
There are savings accounts out there that offer up to one percent interest each month. This allows you to save your money and grow it at the same time. I personally use Ally Bank. Set up a specific savings account just for savings that you don’t touch. No matter what. Set up an auto-transfer for the days you get paid and transfer $20 each time. Then forget about it. Over time you will be amazed how much you have saved.
Cut Down your Expenses
So right now you are probably asking me how are you going to save $20 per paycheck when you are living paycheck to paycheck. Check out my post on How to Lower Your Cable and Internet Bill. This will help you cut your bills down so you have money to save each paycheck.
Change your Mindset About Saving
A lot of Americans do not have a positive mindset about savings. The good thing though is that we tend to be very competitive. So why not change your mindset and start competing with yourself to see how much money you can save. It really is a great feeling when you look at your bank account and see that you are not broke.
Some of the best advice on savings that I have ever read was from Richard Bernstein (Chief U.S. Strategist for Merrill Lynch & Co.) in a book called “The Best Investment Advice I Ever Received” by Liz Claman. Richard said his dad once told him to Save. Save a lot and save often.
So I plan to start following Richard’s dad’s advice and Save. Save a lot and save often.