Americans tighten their spending belts

A New York Times article by David Leonhardt, “Buying Binge Slams to a Halt,” makes note of something interesting:

For decades — from the 1950s through the 1980s — Americans spent about 91 percent of their income, on average, and put away the rest. In the last few years, they have spent close to 99 percent and saved only about 1 percent. This simply cannot continue.

It turns out that, at least in the short-term, that spending spree won’t continue. Americans are stocking away more money now that economic conditions are iffy.

Leonhardt says that consumer spending is down as the market and the economy goes down, which makes sense considering rising unemployment numbers and lower consumer confidence.

What does that mean for the average American? It probably means it’s a good idea to save more than 1% of our income for rainy days. It also means that this holiday shopping season might not be a big one.

After all, if you’re out looking for a job and trying to pay the bills, a Christmas present doesn’t seem all that important.

American 1 has a few saving options available for members. Club accounts, like our Christmas Club, let you set money aside just for holiday shopping. Long-term saving options, like certificates and money market accounts, let you save up for an emergency fund. But even the plain ol’ saving account can be your best friend, if you learn to keep your hands off that money until you really need it.

Another way to save: refinancing an auto loan or transferring a credit card balance. If you can save a bit of money each month on your debt payments, why not refinance now that interest rates are competitive?

No matter what happens with your spending or saving plans, just know that American 1 can help you out. Stop in to any branch and talk with a Member Service Specialist to learn about your saving options.

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