For the first time since the 1930s, American’s savings have been in the negative! According to the Federal Reserve Bank, only 41% of Americans save regularly and three-fourths of all households carry some debt.

It all started with the baby boomers. Credit was readily available and the baby boomers used it effectively. Houses, cars and other big purchases were really the only purchases made with credit. Then along came credit cards. At first it was very difficult to obtain a credit card. I remember how hard it was to get a Sears card! Eventually, though, anyone could get a credit card. It did not matter what financial situation you were in.

By 1981, Americans were saving 11% of their income and had 4% on credit cards. By the year 2000 the savings rate had fallen to ZERO and the percentage of income on credit card to 12%. Today we talk more about debt management then we do about saving money. According to experts, we have lost the “feel of money.” When we actually have to pay with physical money we tend to spend less then when we pay with credit.

Budgeting has become a thing of the past, but needs to be revisited. We tend to focus on the items that we WANT, not just the items that we NEED. I was caught in the debt cycle after one Christmas and was fortunate enough to get low rate loans to pay off the higher rate credit cards.

The easiest way I have found to save money is to set up a savings account at a totally different bank then your checking account. Have money deducted every pay period and transfered directly to the savings account. You will be surprised how quickly the money accumulates!