Americans are putting a lot less money aside than they did during the Great Recession. Some experts interpret that to mean people are loosening up and relaxing when it comes to their money. According to a recent CNBC article, savings habits are backsliding as the financial crisis becomes a distant memory. Although my savings is quickly dwindling, it's not because I have amnesia when it comes to the recession. I just have more expenses now than I did at that time.
Fluctuating savings rates
According to the U.S. Commerce Department data, the savings rate for Americans went up from 3.8 in 2008 to 8.7 in 2012. Experts say the national consumer savings rate now stands at just 4.4 percent. I can understand how someone might interpret that as meaning consumers are more confident. However, I think most people are in my same predicament. They can't save what they don't have.
Getting used to furloughs
When the Great Recession first started, I was introduced to the concept of furloughs or unpaid days off. What I didn't realize is that I'd have to deal with furloughs for years to come. In fact, I have to take a furlough day off this month, which is like receiving a temporary pay cut. It's difficult to save as much money on a lower salary.
Spending more on health care
Although my paycheck is smaller, my health care bills are growing. I noticed the cost of eye glasses and eye exams for my family went up by 30 percent in the past few years. Also, we are paying more for medications, doctor visits and dental care. Although I save someone money into a health savings account, it's not enough to cover all the eligible expenses. Although we never used to carry a balance over from one month to the next, we decided to take two billing cycles instead of one to pay off his college expenses.
Paying for college on credit
Although I didn't intend to pay for my son's college with credit cards, it happened by accident. I didn't anticipate a broken air-conditioner and car expenses the same month as his tuition was due. I ended up paying for his books and equipment with the credit card. According to a recent article by Wall St. Cheat Sheet that cited Equifax, credit card balances are on the rise. Bank credit cards increased from $536.5 billion this year compared to $533.3 billion last year.
I'm not convinced that anyone in American has forgotten about the impact of the recession. Just because people aren't saving as much doesn't mean they are spending more on frivolous things. Some of my friends who lost their jobs during the recession decided to have children and stop looking for work. They are now trying to make it in a single-income family. After turning 40, I had to deal not only with our children's college expenses but also the grandparents' bills. Some people call it the "sandwich generation," which means our savings are getting eaten from every angle.
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