The other day I was driving down the street, and I noticed that an iconic mall in Los Angeles was under construction to expand its location, and add a bunch of new stores.
This is not the first time I’ve seen this type of thing. Lately, new stores and developments are popping up all over the place. The funny thing is, one drive down a main drag in my parts, and you will find a new building going up right next to an abandoned building, like an old car dealership.
It’s not just new buildings that is causing somewhat of a concern, but the general money attitude I’m noticing amongst people I know.
I listen to friends and I hear stories that start to really concern me, although of course I try to stay out of their financial lives.
I only know bits and pieces about these individuals and their finances, so obviously, there may be more to their situations, but overall it seems that we have a bit of short-term memory when it comes to how financially panicked we felt during the Great Recession.
And the numbers don’t lie!
According to GOBankingRates.com, “62 percent of Americans have less than $1,000 in their savings accounts, and a third of those under-savers have no savings account at all. The portion of savers with balances over $1,000 is 29.1 percent.”
That number is really frightening!
So, is it an earning, or a spending (not saving) problem? It seems a bit of both.
According to this Money article, the theory is that people don’t understand what amount they need to retire: “More than half (53%) say they “guessed” when asked how they estimated how much they need to save for retirement. Two-thirds acknowledged they don’t know as much as they should about retirement investment. And just 27% say saving for retirement is their greatest financial priority vs. “just getting by” (21%) and “paying off debt” (20%). The typical worker saves just 8% of salary, while most experts recommend 15% or more.”
On the earning front, they say that, “the disappearance of pensions, and the decline in 401(k) coverage among private sector workers, especially low- and middle-income households, contribute to the problem for younger Americans.”
Or, based on my own experience, I also think that older Americans might be going through some kind of career transition, or trying to venture out on their own (like I did for seven years) without seeing the kind of income they maybe once had as a full time employee. Or, older people are also trying to help their kids with college, risking their own retirement.
My own personal theory on why we are not saving “in general,” is that we are overly optimistic about our own financial future, and we live more in the now than we do the future…because, you know, the future is just so far away.
I think during the Recession we got a bit of a kick in the pants. Suddenly everyone seemed to be socking away what they could and brown bagging their lunches. But oh how quickly we forget.
I honestly think about it ALL the time and it keeps me in line for the most part (I still slip up occasionally). But, I really don’t want to ever be scared of how I will pay my bills ever again.
I sometimes feel like an odd duck when I say “no” to seemingly innocent offers to go out and do things that cost, “not a lot of money,” But the memories of struggling are firmly seared into my brain.
And although no one can be 100% certain that we will never experience financial hardships if we save, we can probably do a bit more than we’re doing right now in terms of protecting ourselves, and our future selves.
Do you think we’ve sort of forgotten how scary things were during the Recession? Are you where you think you need to be savings-wise?