Posts Tagged 'spending'

The Power to Prosper: 21 day spending fast

Michelle Singletary at the Washington Post proposes a radical idea to get your financial house in order: a 21-day spending fast.

The idea is to purchase only necessities for 21 straight days.

No eating out. No shopping for non-essential items. Just the basics.

“No matter where you were financially, participating in the fast should help you with everything from addressing serious problems to making the small adjustments that keep your finances running well,” Singletary says. “You might even consider doing the fast over and over again, perhaps once a year.”

The benefits range from spending more time with family to seeing how much cash you can stash away for emergencies. Singletary offers budget templates and guidelines to get you started.

And if you’re thinking about getting started tomorrow, “today is tomorrow,” she says.

Christmas Club $250 deposit winner

Christmas Club winner

Congratulations to Nicole Fausz of Jackson – she wins the $250 deposit into her Christmas Club.

Nicole won by opening up a club account in February and making automatic deposits into it with her paycheck.

“It’s an easy way for me to save for my two kids’ Christmas,” she told me.

Way to go, Nicole!

With slumping economy, Americans may be saving more

For a while, the national savings rate – how much people save instead of spend – was negative. But that trend may be reversing, says the Washington Post, because of the soured economy.

When people are facing job loss, higher credit bills, and less disposable income, they will seek ways to keep and save their money. Beware the unintended consequences, says the Post:

Ironically, even if consumers are saving more, they could be helping to make the recession worse. The more people save, the less they spend, driving down demand for goods and services, which in turn dampens economic growth. The economist John Maynard Keynes dubbed this “the paradox of thrift.”

Unfortunately for the economy, more Americans are cutting back on frivilous expenses, like hair stylists and dining out, because many fear unemployment and rising medical costs.

What about you? Are you saving more these days, or looking for ways to cut expenses? Let us know in the comments.

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.

American 1 Federal Credit Union