I recently read an article off NuWireInvestor.com that focuses on the alarming rate (or lack there of) at which Americans are currently saving.  It was a lengthy article but I did want to capture a few paragraphs to share. My emphasis is that it is time for a majority of Americans to realize the difference between what they may “think is personal savings” (home equity, certain investments) versus what “truly is personal savings” (secure emergency fund or supplemental college/retirement fund).

I am proud to say that FORUM Credit Union realizes the current position a majority of Americans are in and has addressed this issue head on.  In 2009 FORUM has developed a menu of savings products to assist members with the uniquely difficult task of savings discipline.  After reading the next few paragraphs, take a moment to contact a FORUM Branch Manager to discuss the 2009 “Save It Up” product line and help get yourself and America back on the road to financial security.

For the past two years, and for the first time since the Great Depression, Americans are spending more than they earn. In 2006, Americans saved at a rate of negative 1 percent, according to statistics released February 1 by the Commerce Department, meaning they not only spent all of their after-tax income, they also dipped into their savings or increased the amount they borrowed. The savings rate in 2005 was negative 0.4 percent.Americans are saving at a negative rate for the first time since 1932 and 1933, when they had to dip into their savings for basic items such as food, clothing and shelter. At that time, with unemployment at 25 percent, many had no income and no option but to use their savings. The savings rate reached its record low, negative 1.5 percent, in 1933.

These days, Americans are overspending for a variety of reasons. Many families in America are living above their means. As the gap between the rich and the poor grows, many people spend more money than they have in an effort to keep up with the proverbial Joneses. A lot of people assume that they have all the money they need in the equity in their house; people are using home equity for everything from new cars to vacations.

Many Americans likely believe that, because their investments are accruing good returns, they are financially secure and don’t need to save any money on top of their investments. Some assume they don’t have to save any additional income, because they contribute to a 401(k) or IRA. While investments are of course a means of saving, the negative personal savings rate means that many Americans might be without the commonly recommended savings cushion intended to last three to six months. FORUM can assist today with a great line up of “Savings Cushion” products to ensure you are financially fit throughout these difficult economic times and beyond.    

See you at a branch soon.