If the federal government’s recent partial shutdown taught us anything it’s that all of us should be saving for a rainy day.
Just weeks into the partial shutdown, The Atlanta Constitution-Journal says its offices were bombarded with stories about people turning to food banks to feed their families.
The hard truth is we do not save, says Giacomo Santangelo, a professor of economics at Fordham University.
According to the Federal Reserve, Americans’ personal savings rate is less than 7%, meaning for every $1 we take home less than 7 cents goes toward savings. It was 13% in the 1970s.
“This means that 41 percent of consumers would have to go into debt to cover small unexpected expenses such as a car repair or replacing a broken appliance, and it’s been this way for years,” Santangelo said. “The government shutdown only exacerbated the problem.”
Some experts say as many as 80% of U.S. workers are living paycheck to paycheck. Read the full story.