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Americans save on average 3.6 percent of their disposable income. This is not good, and a situation that has me wringing my hands with worry.
The very concept of “average” leads me to believe that relatively few people are true savers — where they put aside at least 10 percent of their income, consistently, every month. For these people, it has become a habit. But given that the average savings is 3.6 percent, there has to be a lot more people saving zero percent than those saving 10 percent to reach that average. Saving zero percent means saving nothing! Not a single dollar. What are people thinking?
I’ll tell you what I’m thinking: It’s the cellphone bill. Now the biggest bill in many households outside of the mortgage payment. It’s sucking the well dry. It’s the modern-day version of crack.
CTIA, the cellphone trade group, said in a report released in January that the average cellphone bill is $188 for a family of four. OK, so that’s the average. That means some are paying $400 a month or more. Which begs the question: Has our addiction to electronic connectivity become such an obsession that we’re sacrificing our futures to be able to post to Facebook while maneuvering the drive-thru to pick up dinner? Just consider that your cellphone bill might be the place to start cutting back so you can free up some money to save.
Last month, Everyday Cheapskate and Debt-Proof Living promoted the recent annual America Saves Week. I couldn’t think of a better time to recommit to saving, and told anyone who would listen about the Feb. 25 to March 2 event. Whether readers needed to boost what they were doing already, or begin saving for the first time, my message was to just do it.
If you missed this annual event, no worries. You can hold your own savings week. Visit AmericaSavesWeek.org, make sure you have a savings account open and ready to go, and learn how you can put your savings program on autopilot.
One of the reasons you need to move to the fast track of saving is something a lot of us would rather not think about: retirement. Did you just wince in pain? I know the feeling! But the results of a survey at AmericaSavesWeek.org reveal what I’ve long suspected: Having a savings plan with specific goals can have beneficial financial effects, even for lower-income families. Even when income is taken into account, those with a savings plan are much more likely to spend less than their income and save the difference, have adequate funds in an emergency account, and — among those not-yet-retired — say they are saving enough for retirement.
Remember, retirement is inevitable. But the earlier you get started, the better. And if it’s too late for you to start early, it’s still not too late to get started at all.