Saturday, September 6, 2008


How much money does the average American save each month? Well, according to Forbes Magazine, “In 2005 the personal savings rate as a percentage of disposable income in this country was negative 0.5%”.

The average American is living paycheck to paycheck. If you are saving anything at all, you are above average. Even those whose income indicates they could be saving aren’t. Why? Because they are up their eyeballs in credit card debt. Why are they in debt? Because they are living beyond their means. Now let me qualify that I know this is not everyone’s scenario. But, it truly does represent our current buy now, pay later mentality.

I know a little bit about this…. from personal experience. There was a time when dh and I were considered D.I.N.K.S.- (Dual Income No Kids). I don’t even know if they call it that anymore, it’s been a long time since we were DINKS. Anyway, we both worked outside the home, in fields that paid pretty well. Seriously, now that I think back on it, for the first 4 yrs of our marriage, we brought in about ½ of what we are making now. Our house payment was actually less than it is now, AND we had no kids. That means none of the expenses that go along when you add two more to your family.

Here is the worst part… we saved NOTHING! That’s right absolutely NOTHING. And that my friends is sad. We probably had the ability to save almost ½ my salary or more. That’s a huge chunk of savings over a four year time period! But instead we lived like most Americans today, paycheck to paycheck. We ate out a lot, because we could afford to, and quite frankly because I didn’t like to cook and didn’t feel like cooking. We also bought on credit. Any major purchase to remodel our home, was bought using our credit cards. Holiday shopping was also pretty bad, and like most people we racked up some pretty steep bills come January. Typically when a bonus or tax refund came through that money was earmarked to pay off credit cards. Sound familiar? It’s not a fun way to spend that refund or bonus, let me tell you…..

If you are a newly married couple just starting out I encourage you to sit down together and think about what you make and how you can save. Someone once told me even a small amount saved over a long period of time can make a big difference. I didn’t listen, and here we are just now beginning to work on our savings plan. I hope you won’t make the same mistake we did. We were fortunate and have been spared so many of the financial disasters that couples can get themselves into. If you really don’t know where to begin I recommend grabbing a copy of The Complete Financial Guide for Young Couples by Larry Burkett. This is a good basic starting point to learn about managing your finances together. I also recommend you listen to Dave Ramsey on the air or on the net. There are many couples that have come through very difficult financial situations, and become free from debt. Fridays are a great day to hear those success stories! Also, if you are seriously in debt., don’t try to start saving money yet. The first step is to get out of debt. Here is a link to Dave Ramsey’s website where he talks about the Debt Snowball- The truth about how to get out of debt.

My goal is to kick the very last of our debt out the door, (except for our house) and to start saving more of our money. I'm not sure how soon that will happen with our international adoption.... but I'll keep you posted!


Debt Settlement said...

I'm amazed that people do not care about the money they make. Most people just spend it once they get it and they wonder why they can't pay bills. Great post.

Anonymous said...

good post!