No Savings? You’re Not Alone

For whatever reason, food storage seems to get all the attention when it comes to preparedness. Perhaps some people think that if they have just enough buckets of wheat and beans, then all will be well. In fact, preparedness is a whole lot more than full pantry shelves. Perhaps one of the most important ways to become prepared is financially. Sadly, too many Americans are woefully unprepared in this category, and, in fact, are lacking even in savings for their retirement.

image by stuartpilbrow

Jim Wang over at Bargaineeering.com has this to say about where the majority of Americans stand when it comes to saving money.

CNN Money reported last week that 43% of Americans have less than $10,000 in retirement savings, which is a statistic provided by the Employee Benefit Research Institute in their Retirement Confidence Survey (2010 results). If that figure isn’t scary enough, it appears that 27% of workers have less than $1,000. Both figures are increases from 2009, when 39% had less than $10,000 and 20% had less than $1,000 a year ago.

While the statistics are sobering, it does show how much the recession has hurt a lot of people. If you lose your job, the first thing to go after your emergency fund is probably going to be your retirement savings. Keeping a roof over your head and food in your stomach is going to take precedence over retirement tomorrow.

Last year, Suze Orman stopped emphasizing the need to pay off debt, and, instead, now advises people to save first. When a job is lost or hours cut, your primary concern is whether or not you can continue making the mortgage payment or rent. The money in your savings account isn’t just a nice idea anymore. It now can mean the difference between having a home, or not, and getting a new job is more difficult than ever.

Jim goes on to say,

If you’re one of the ones with less than $10,000 in retirement savings, don’t despair because 43% of Americans are there with you. We’re going through some tough times now but once we get back on our feet, retirement savings has to become a priority. Social security and other entitlement programs aren’t going to be here forever. It’s only a matter of time before they are replaced as defined benefit (pension) retirement plans are being replaced with defined contribution (401k) retirement plans (Math doesn’t care which political party’s name is written on your voter card, the current system is not sustainable).

Actually, Jim is more optimistic than I am about our economy’s future. With leaders in Washington telling us we can expect double-digit unemployment for ten years or more, it’s not exactly reassuring.

If saving money seems a near impossibility, it’s time to evaluate your skills, knowledge, and experience and create new income streams. Our economy may be sluggish, more or less depending on your location, but people still have needs, and the creative person can find ways to meet those needs regardless of what is happening on Wall Street or in Washington D.C. Internet businesses are booming. Ebay and Craigslist offer opportunities to earn some quick cash, and some direct sales businesses are flourishing.

Financial problems are both oppressing and depressing, and really, it doesn’t help at all knowing that others are in the same boat. The only way to turn the corner financially is to cut out every extra expense you can and begin earning a little more. Painful? Yeah. Easy? Not really. Worth it? Definitely!

(6) Readers Comments

LizLong
March 22, 2010 at 2:28 pm

We've always worked hard to save, but the way things are going in our government…. How beneficial is it to have a big fat bank account awaiting retirement if hyperinflation hits? Not very. Clearly, we can't predict the future and it might not happen, and my family certainly isn't going to stop saving, but those fears have definitely impacted how we're dealing with finances.

We need to improve the insulation in parts of our house. We will do that sooner rather than later because, well, there's still insulation to be had and it's not $1,000 per hour for workers because hyperinflation hasn't hit. I've also stopped buying cute sandals in favor of sturdier shoes that will last longer. I've bought ahead more sizes on the kids clothing when I see things on sale. I guess my point is that some of our savings / financial planning is being done a different way right now, and I think that's true of all preppers.

Reply
- TheSurvivalMom
  March 22, 2010 at 2:39 pm
  
  Liz, I agree. Savings accounts pay so very little in interest that it's hardly worth keeping your money there. From what I've read, even in countries that experienced hyperinflation, paper money was worth SOMETHING, so saving money isn't a foolish move, at all. I think the worst decision is to put all your eggs in one basket, e.g. tons of stored food but no cash saved, trusting in Wall Street but not having any type of hard goods stocked up.
  
  The thing is, no one knows when our faltering economy will come to its' knees. There are still millions of family who haven't been touched by this depression in any real way. They still get their paychecks every Friday. Some sectors are still doing well. Hey, if you're not paying attention to the bigger picture, all still seems well. A friend of mine told me the other day that their construction related business is doing very well and made the comment, "We're living paycheck to paycheck like everybody else." WTH??? Now THAT is scary and beyond oblivious. I wanted to scream at her, "Stop spending so much damn money and acting like it's 2006!" I didn't. I'm too polite for that, although I did tell her about my blog. ) My point is that for a lot of people, the economy has just taken a little dip, and soon everything will be fine.
  
  Even if our economy continues as is for several more years, Liz, the clothing and shoes you've stocked up on will be worn. When I want to make a new recipe, I almost always have the ingredients in my storage pantry. Living paycheck to paycheck is insane, and really, it always has been. We just weren't aware of how risky it was.
  
  Reply
  - LizLong
    March 22, 2010 at 5:46 pm
    
    Yep. We're still saving, but we are investing more in hard goods, home improvements, a good vegetable garden, etc, than we otherwise would, and less sitting in a bank or stocks & bonds. We still have that, just a lower % than a few years ago. We haven't been hit as hard as many have at this point and if it stays that way, awesome, but…. And the other concern is having paper money, but having it in a bank that fails and you lose it. Likely? No, but plenty of unlikely or impossible things have happened in the world. We've actually got more money in silver coins as part of our savings now. Not a lot, but every dime and quarter we add is just a bit more security for us long-term.
    
    And my mama taught me to always be buying a year or two ahead, so it's a continual process of using and renewing what we have. Food, towels, cleaning supplies – it's not just the food stores.
    
    Reply
    - TheSurvivalMom
      March 22, 2010 at 6:17 pm
      
      Liz, that approach makes so much sense when you think of how much invested money people lost just a few short years ago.
      
      Reply
Linda
March 25, 2010 at 12:52 am

My husband and I took three months' living expenses out of our money market account and are keeping it in a hidden, fire-proof safe in our home. If the dollar collapses in the future, the federal government could declare a "bank holiday" as has happened in other countries with failing currencies. We might need some cash to operate on until things become more normal again.

Reply
- TheSurvivalMom
  March 25, 2010 at 1:35 am
  
  Having some cash on hand is very important. If not a bank holiday, then a severe weather event or natural disaster could either shut down banks or make them inaccessible. Oh, here's a suggestion. Consider dividing the money into two or three smaller amounts and hiding them in very secure places in your home. In a robbery, one cash cache might be discovered, but you would still have the others.
  
  Reply