On the bright side…
Could there be a bright side to this dreary financial climate? A recent consumer study seems to indicate so. While consumer confidence is plummeting, it appears that saving is on the rise.
According to a story on CNN.com, U.S. consumers are socking away 20 percent more in short-term savings and a whopping 60 percent more towards retirement. We’re also starting to pay off debt, contributing 6 percent more to our credit card bills and the like. It seems the flailing economy, for all its drawbacks, is serving as a wake-up call to Americans.
For too long, we’ve been spending money that wasn’t actually in our pockets. Hey, why worry about whether you can afford x purchase when you can simply whip out the plastic? Why save when you can just borrow against your home? But it’s finally sinking in. The only way to have the things you want in life is to save for them. It’s only too bad we had to learn the hard way.
Now, the ultimate test is whether we can keep up our newfound thriftiness. When the survey participants were asked if they would continue their savings behavior, more people said no last month than in September. But before you take that as permission to fall back into your spend-happy ways, here’s a tip.
The study also found that the people with the most confidence right now also happen to have a financial plan. Coincidence? I think not. Just knowing you have some control over your money can keep you positive. And the more optimistic you are, the more likely you are to stick to your goals.
Once you commit to starting a savings plan, it’s easy. Write down your monthly expenses and compare to your income. Your first goal: to spend less than you earn. Once you’ve got that under control, you can start identifying places to cut back (in moderation, of course—you don’t want to burn out right away). Make sure to allocate as much money as you can towards paying off debt—it will save you in the long run.
For advice on your financial plan, contact DebtStoppers for a complimentary one-on-one debt analysis. Not many things are free nowadays—take advantage of this freebie while you can.