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How Much Do You Save?

65% of American Families save very little or nothing, and over 50% are not properly prepared for retirement. Only 40% of Americans have saved some amount towards retirement.

Right now our U.S. economy is strong. We have low unemployment and increasing wage growth, but Americans still struggle to save. This is according to a survey from Bankrate.com, which found that 20% of Americans do not save any of their income. Those that do save something are only putting away a small amount.

Only 16% of people that responded to the Bankrate.com survey said that they saved more than 15% of their income, which is what experts generally recommend. Only 25% of respondents report they save between 6% and 10% of their income and only 21% say that save a minimum of 5% of their income. Sadly 19% say that they save nothing.

Experts say that with these low savings rate Americans could be setting themselves up to fall short in retirement. "With a steady, significant share of the working population savings nothing or relatively little, it's virtually guaranteed that they'll be unable to afford a modest emergency expense or finance retirement" says Mark Hamrick, Senior Economic Analyst at Bankrate.

The economy might be strong now but that will not last forever. Eventually there will be a weak economy or recession that will slow down the current economic growth and prosperity that most people are enjoying now. Most experts estimate that half of the American population will not be able to maintain their current standard of living once they enter retirement. A separate report from GoBankingRates found similar results. Over 40% of Americans have less than $10,000 saved for when they retire.

What is keeping us from saving? The number 1 answer from 39% of respondents to this survey said it was "Expenses". Another 16% said that they do not have a "good enough job" to generate the income needed to save. Then 16% of respondents said they have not made it a priority in their family budget.

"The average American has less than $5,000 in a financial account , a quarter to a fifth of what you should have, and those aged 55 to 64 who have retirement savings only carry $120,000 on average - which will not last long in the absence of paychecks," the survey reports. But saving money for retirement does not have to be as hard as it seems. For starters, anyone looking to lower their expenses can consider downsizing their home, trimming their grocery bill or making it a priority to eliminate debt. Those with the capacity to take on additional work can also bring in extra cash each month by renting out spare rooms, reselling items online or taking on freelance work.

The secrets to savings money follow a simple plan.

  1. Create an income and spending plan so you know where your money goes every month.

  2. Pay yourself first. You will never save unless you make it a priority.

  3. Spend less than you earn. Enjoy life, but do not try to keep up with the "Jones".

  4. Never use debt to increase your standard of living. If you cannot afford it then you do not need it.

If you are looking for a Financial Consultant that can work with you to develop a strong strategy for next year - contact Stephen Westurn (214.240.0701) or Stephen@Westurnconsulting.com for a get acquainted session.

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