SAVANNAH, Ga. (WSAV) – If you have struggled over the years to save money for even the smallest emergency, you’re not alone. Four out of 10 Americans don’t have even $400 for an emergency.
This week, the Consumer Federation of America is urging all of us to take a look at our money and maybe more honestly our spending habits and our debts and grapple with the issue of a “savings account.”
It’s part of the America Saves program and while this may have seemed like just another Monday, this is actually America Saves week.
“What we’re really trying to do is change the culture of Americans from spending it all to saving some,” said George Barany, the director of America Saves program. “Our ambition is for every American to have an account in which they save in throughout their entire lives.”
Barany says they’ve become advocates of automatic savings in terms of using direct deposit. He says more than 80 percent of Americans used direct deposit for paychecks. Their hope is that more divert (even a small sum) every paycheck automatically into a savings account.
“If you have access to direct deposit through your job, we recommend you take $10, $15 or even $20 out of your paycheck and into savings. Over time that will build up, but more importantly, you will learn how to save effectively and it won’t be that painful,” said Barany.
America Saves also encourages people to take the pledge to start saving and if you have no savings and fear you can’t afford much to start with the goal of eventually saving up to $500 for emergencies.
“It’s about creating the simplest of financial plans, the pledge is a tool,” said Barany.
The American Saves website offers success stories for others to emulate. “Our research shows that even low-income people with a savings plan are twice as likely to be successful as compared to people without a plan even and that even includes those at higher income levels.”
He said many middle-income families also live paycheck to paycheck and have no savings account either and no plan on attaining savings. Barany believes a change in focus regarding debt and more available credit are the reasons.
“We’ve been brainwashed to think it’s okay to live in debt,” Barany told me. “To get stuff even though we can’t necessarily afford it and to really live our entire lives behind the 8-ball and in debt.”
He says no matter how large or small your paycheck, you need to develop the mindset of saving and that America Saves can offer you not only help but follow up support.
“We show you how to be successful, how to save because you feel better if you manage your money more effectively,” said Barany.