I think we can all agree on one thing: Saving is good.
The big dilemma is how to get people to put money away for emergencies, retirement or that next tropical vacation.
Sometimes, turning spenders into savers is as easy as setting up an automatic transfer from checking to savings, or enrolling in a workplace retirement plan. Other times, it's not the desire to save that's lacking; it's the money.
A recent survey of more than 1,000 Americans conducted for America Saves Week -- an annual event put on by 100-plus organizations to promote savings -- found that the less money you earn, the less likely you are to have a savings account.
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Did we really need a survey to tell us that?
At a time when pay cuts, not pay raises, are the norm, how can Americans -- especially the working poor -- be expected to save much of anything? Even in good times, it hasn't been our national culture to sock away money.
"The primary focus of our nation for decades has been on debt and spending; not on saving. Thus, the nation has encouraged people to be 'this close' to the edge," said Dallas Salisbury, chairman of the American Savings and Education Council. He also points out that the Federal Reserve's near-zero interest rate, which Fed Chairman Ben Bernanke just said would hover around zero for several more months, provides a reward for borrowers, not savers.
Salisbury goes so far as to say that Americans' lack of savings is a "national scandal." Some elected officials must agree. Proposals are winding through Washington on everything from giving savings accounts to newborns to establishing automatic workplace pension plans.
Meanwhile, what can we do to ramp up savings in these lean times?
Start small. Tracy Fischman, executive director of AccountAbility Minnesota, a nonprofit that prepares taxes for low-income people, suggests that those living paycheck-to-paycheck get into the savings habit with as little as $5 per week. Jason Fichtner, chief economist for the Social Security Administration, recently suggested $2 per day.
Automate. Studies have shown that people are more likely to stick with saving if it's effortless. The Financial Services Roundtable, a trade group made up of large financial institutions, is urging its members to offer free regular transfers from checking to savings, low minimums for automatic savers and incentives for customers to put savings on autopilot. Set up regular transfers into a U.S. Bank S.T.A.R.T. (Savings Today and Rewards Tomorrow) account, for example, and you'll receive a $50 Visa gift card when your balance reaches $1,000.
Save your refund. A CompleteTax survey showed that more than a third of taxpayers plan to save their refunds this year, but workers making less than $50,000 are most likely to pay bills with theirs. Since 2006, Fischman's group has helped to open 2,200 savings accounts. But that's only a fraction of the people the organization assists. "They are using their refunds still to pay for basic needs -- food, any debt they might have, car repairs," she said.
Get the match. If your employer matches a certain amount of retirement savings, try to save enough to snatch that free money. Unfortunately, one of the first things many employers cut during the Great Recession was this benefit. The good news is that, of the employers who axed or reduced matches, 8 in 10 plan to bring them back in 2010, according to human resources consultant Hewitt Associates. The bad news is that one-third of employees with 401(k) plans don't receive matching funds in any economy, and not every employee has a workplace retirement plan to begin with.
Find a match somewhere else. Individual Development Accounts are designed to help low-income people build assets by matching savings that will help start a business, buy a house or get an education. You can also check IRS.gov Publication 590 to see whether you qualify for the Saver's Credit, which will match up to $1,000 in retirement savings for individuals and up to $2,000 if filing jointly.
Take action. America Saves Week just ended for 2010, but you can still take stock of your progress and sign up for monthly savings messages at www.americasavesweek.org.