Who Can We Blame for Our Failure to Save?
February 8, 2010 by Mrs. Frugal
I came across this chart from BillShrink.com while researching another article. It shows the personal savings rate trend by month from 1959 to 2009, along with an opposing trend of rising consumer debt.
I find the information presented interesting, but what most fascinated me were some of the comments readers left that sought to justify the decline in the Personal Savings Rate.
“The Fed Rate is so low”
One commenter asked, “with the Fed keeping rates so low, what is my incentive to save?” I can think of a few. Is a low rate of return an excuse not to prepare for the unexpected?
“Cost of living has increased”
Another commenter pointed out that in the sixties his parents were able to purchase a home with a mortgage that equated to less than 20% of his father’s take home pay. It’s true that the cost of living has increased, but when do we account for lifestyle inflation? Who forced us to buy bigger and bigger houses? And exactly how often do we need a new car? I suppose we must play our part in planned obsolescence.
What do you think? Are these valid reasons for the decline in the Personal Savings Rate?
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This is really sad…. I have no savings but I am just starting to work towards rectifying that.
I really think our generation is going to cause so much hassle for our kids (I’m 28 btw) and I hope we can do something to reverse this trend in some way in the next 20 years or so.