5 Ways to Celebrate America Saves Week 2009

Feb 22nd, 2009 | By Rob | Category: featured

This week is America Saves Week. Since 2007, organizations have dedicated the last week in February to ending the near zero personal savings rate in the United States. Amid the concerns that America’s banks will have to be nationalized because they didn’t lend wisely, it is probably also a great week to celebrate the FDIC protection of personal bank accounts. The week is rolling already, as the economic crisis has jumpstarted savings in a way that the first two annual America Saves Weeks could not: the savings rate in the last three months of 2008 was the highest since 2001.

The timing of America Saves Week is interesting, to say the least. Two weeks ago, CNN Money ran on article on why saving is killing the economy. The federal government has just passed a massive economic stimulus package in order to make up for cutbacks in business spending. The national debt is growing at an enormous rate. And last year, the government sent out stimulus checks so that Americans could spend that money on goods and services.

Yet, Americans are increasing their savings and decreasing their spending. During December 2008, the personal savings rate in the United States was 3.6% and spending declined from the six month in a row. That’s a dramatic reversal from our recent past. From 2005 until the summer of 2008, the savings rate averaged just 0.5%. During 2005, Americans’ personal savings rate was actually negative. That means that Americans spent all the cash that they earned during the year, and a bit more. The only two years before it in our history when the savings rate for an entire year was negative was during the Great Depression.

In light of our current economic conditions, and with recognition of the fact that we need to find a healthy balance between saving and spending, I’ve come up with the following 5 ways to celebrate America Saves Week 2009:

1. Open a stock or savings account and authorize your employer to put a small portion of every paycheck in your new account.
The “pay yourself first” principle works. If you never see the money, you’ll never miss it. Over the course of the year, the money will add up. In no time at all, you’ll have a bit of a nest egg.

2. Keep track of your spending for the week.
I hate budgets, as I can never stick to them. One alternative to a budget is to track your expenses. As the saying goes, “Knowledge is power.” You may be surprised at where your money is going over the course of the week and it will motivate you to stop spending.

3. Skip an expense or two.
If you decline your morning Starbucks run for a few days a week, and choose the free coffee at work instead, the savings really will add up over the year. Try it out for the week. Calculate your savings during the week and multiply by 52 to calculate your yearly savings. If you aren’t a big coffee drinker or can’t stomach the thought of using the coffee machine at your place of employment, try eating at home or packing a lunch one day of the week rather than eating out.

4. Reach for cash.
Credit cards are convenient. But reaching for plastic doesn’t have the same psychological impact on our spending impulse as reaching for cash, and it often comes with a huge interest rate if you aren’t paying it off immediately. Leave your plastic in your wallet or purse this week and use cash instead.

5. Enroll in the American Saver program.
Join 145,000 other Americans who have declared their interest in building their own personal savings and receive free financial information from America Saves. You’ll also find hundreds of tips on how to increase your savings on their website. This year’s goal is to sign up 75,000 new savers. Let’s help them on their way. Enroll here.