The Lost Art of Saving

Why are families in America not saving money anymore?  Each pay period all the money comes in, all the money gors out.  Where is the discipline to save?  Below are what I think are some reasons along with solutions to deal with them.

“Gotta Have It Now” Thinking.  Consumers today are very impatient.  They see a pricy item packaged terms such as “No Payments, No Interest” and jump on the opportunity.  Having stuff is allright as long as you understand the opportunity cost of having it now.  The payments and interest do get paid (usually kick in after 90 days or so) and the already tight budget gets tighter because “I want it now” thinking prevails.

Solution: Save for big purchases.  You will be a lot more happy paying cash for it than being chained to those payments for 24-36 months.  Besides, if you’ll admit it, the one you own works quite well as it is. 

Availability of Credit.  Up until this past year, if you could breathe you could obtain credit.  While credit standards have tightened a bit lately, there are still abundant offers to sway consumers to buy.  Being in a recession hasn’t slowed down TV advertising and hundreds of offers to obtain credit.  Advertising debt is a billion dollar industry.

Solution:  Just Say No.  You can wait and save for the item and purchase it later. 

Lack of Discipline.  Today’s consumer is not interested in having a financial plan.  You’ve heard the phrase:  “Those that fail to plan, plan to fail.”  What happened to planning ahead for your financial goals?  You will need new tires in 6 months, you will retire someday, you will send Jasmine off to college, you will die (not a popular idea).  This list doesn’t even cover all the events you will go through.  It takes concentrated effort to address these issues.  

Solution:  Put these issues on paper and begin looking at your entire financial plan.  If you’re married block off an uninterrupted hour to begin talking about these topics.  You and your  family will only benefit by beginning these conversations.

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