financial reflections

I’ve known for some time that savings rates were down in the US.  People are saving less and less, and to make matters worse, they were buying things on credit as well.  But I never thought it would get this bad.

Now I’m reading that savings rates in the US are at a 72 year low.  In fact, the only time we’ve saved less as a nation was during the Great Depression.  Back then, people had to dip into savings just to eat.  Now people are passing up savings and going into debt for big-screen televisions.

I know how unsettling it was for me to look at my finances and see that I was heading in the wrong direction.  Apparently there are millions of Americans out there in that position, but I’m not sure if many of them are even aware what’s happening.  To make matters worse, real wages are having trouble keeping up with prices.  What does that mean?  People are digging themselves a hole they may never get out of.

Which leads me to my prediction that bankruptcies will contine to be strong - in spite of the Oct. 17th, 2005 law that made bankruptcy harder than ever.  As people get in a bind, they seem to be resorting to the fringe economy, getting payday loans, pawing valulables and only getting themselves into more and more trouble.

This all has only strengthened my resolve to:

• pay off my credit cards
• build savings accounts
• invest for retirement

In short, do all that stuff that the gurus keep recommending: pay myself first, avoid debt, rely on sound investments, etc.  That might sound boring.  It might sound like I’m living in the Great Depression.  Based on what I’m reading, I am.