This type of news never really surprises me anymore. Since the recession began, I have been doing numerous articles from different sources that cite a paucity of saving, an increase in spending and not enough income generation. It seems people don’t care about the future and actual capital investment.
The Commerce Department released a report yesterday that found American spending rose 0.8 percent last month, incomes grew 0.4 percent and in order to spend money they didn’t have they cut their savings for the third straight month.
Why do we constantly do this to ourselves? ECN has noted in the past that the savings rate in Canada is 2.9 percent, while the rate in the United States is close to four percent. Many financial experts suggest always to save 10 percent of whatever income you make. I personally like to do 20, but my goal is to be like the Chinese and have a savings rate of 50 percent.
Haven’t Americans and Canadians learned from the recession to live within your means? It seems they haven’t.
Here’s an interesting video of Peter Schiff explaining that we need more savings, less debt.