Released Sept. 6, 2007
STILLWATER, Okla. -- According to a recent U.S. Census report, many household incomes have been static or even falling and the number of children in poverty has risen. This may explain why in a study conducted for America Saves, half of those surveyed said they were “very worried” or “somewhat worried” about their personal finances.
The saving rate in America continues to be at or near zero. The survey found that a third of Americans are not saving. Instead, they are spending all or even more of their incomes. In low- and moderate- income households, the percentages of non-savers appear to be much higher.
Glenn Muske, Oklahoma State University Cooperative Extension Service interim associate dean, assistant director family and consumer sciences, said many Americans, when asked, feel challenged as to how they can save money or, for those who are saving, how they can increase their savings even just a little more.
“There are ways to cut spending fairly easy and painlessly,” Muske said. “Find small savings that add up to big savings over time and keep a careful record of all expenditures for a month. You may be surprised to learn how much you are spending on things such as a daily latte or restaurant meals.”
Comparison shopping is a good way to find the best deal on necessary purchases such as food, transportation and insurance.
Muske said to refrain spending too much on birthdays and holidays, especially Christmas.
“A few well chosen gifts are likely to be more appreciated than a costly pile of gifts chosen thoughtlessly in a shopping mall venture,” he said.
Payday loans can charge interest rates of 500 percent and interest rates on credit card debts can run 25 percent. Muske suggests paying off these high-cost debts; you could save hundreds, even thousands a year.
“Build an emergency fund to avoid having to take loans to pay for unexpected purchases,” Muske said. “That fund is usually better kept in a savings account, despite the low interest rates these accounts pay right now. Try to keep a high enough balance to avoid monthly fees.”
Save automatically by asking your bank or credit union to automatically transfer funds each month from your checking to your savings account.
“Even putting up as little as $10 or $15 a month helps,” Muske said. “Also, put all your loose change into this account. For many people, that could be up to $100 a year.”
Low- and moderate- income workers qualify each year for Earned Income Tax Credit and this can often put more than $1,000 in the pocket of those who qualify he said. IRS Publications 596 explains how to apply, and then try to save at least half of this windfall.
Another suggestion is to take advantage of employer retirement savings contributions.
“Some employers match up to 100 percent of your contributions,” Muske said. “While we encourage letting this money build up until retirement, it can be withdrawn or borrowed on to cope with serious emergencies.”
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http://www2.dasnr.okstate.edu/Members/katie.reim-40okstate.edu/saving-money-during-tough-times
Contact: Katie L. Reim, (405) 744-6792, katie.reim@okstate.edu
