Finding More Money for Savings
Feel like you’re stretched to the max financially? If you do, you’re not alone. A growing number of Americans are spending more and saving less than ever before.
Track the Money
Saving more during their working years will help Americans have a more financially secure retirement. For anyone who is looking for a way to save more and spend less, tracking where the money is going is a good first step. Here are some government statistics on how Americans spend their money*. How do your own spending patterns compare?
Spending on the Basic Necessities
Housing, food, and clothing account for about half of the typical American household budget.* Transportation expenses and spending on health care also account for a significant share of the typical household budget.
Spending on the “Must Haves”
More and more items that were once regarded as luxuries are now considered necessities. This expanding universe of “things” Americans can’t live without is adding to the strain on wallets — and making it harder to save.
The good news is that you can make changes that will help build your savings. While there’s typically little flexibility when it comes to certain expenses, there are other areas that offer good opportunities for saving. A budget can be a great help in identifying areas of potential savings.
It allows you to reconsider what are — and are not — “necessities.” And, with a budget in place, you will be less likely to use credit to buy unnecessary items. It may not take you long to find enough room in your budget to boost your retirement savings.———————————————————————————————————— *Consumer Expenditures in 2006, U.S. Department of Labor, U.S. Bureau of Labor Statistics, 2007.
**Luxury or Necessity? ThingsWe Can’t LiveWithout: The List Has Grown in the Past Decade,
Pew Research Center, 2006.
*** Source: St. Louis Federal Reserve Bank – http://research.stlouisfed.org/fred2/series/PSAVERT