How much is the average middle class family saving? According to this article, not much. The study involved boiled down to three questions:
1. Do you have 3 months income put back?
2. Can you cover a jobless spell?
3. Can you cover a medical emergency?
Respectively, 18%, 22%, and 23% of middle class families have done these things. The numbers (spanning back to 1989) have never been great but this is low even by comparison. I will conceed that the drop in interest rates over the last few years really discourages savings, but at the same time having money put back is always important.
What about you? I realize a good chunk of our readeship is not in the middle class family demographic but are you living from paycheck to paycheck, living with a comfortable amount of savings, or somewhere in between? Are you living above, at, or below your means? How do you answer these 3 questions? To be honest we're right on the bubble for #1 right now.
One thing that caught my eye was the following:
"One family feeling the pinch is the Andrew Miller family in Charleston, S.C. With a combined income of just less than $100,000 a year, Miller and his wife say they work harder than ever but are no better off than five years ago. They keep a tight rein on spending, but tiny raises that don't match inflation and escalating health costs are leaving them feeling like they are treading water."
A question I always ask myself when I see something like this is if they have a budget. Since I won't find the answer to that, I'll ask you: Do you have a budget? My family does and while we're not the best at sticking to it, being in the hole budget-wise really helps us cut down unneccessary spending. It also helps prevent arguments over money since you both have clearly-defined rules on what you can spend and you've both agreed to this beforehand. Therefore there is a mutually agreed to "bad guy." For example, like SAWB I have some interest in the new Nintendo but I probably won't have the money on budget to buy it at launch since I'm a bit overdrawn after our yearly clothes-buying super excursion and still need to get some supplies for winterizing the boat. And I don't even want to think about passing up my favorite cigars now that they're back out for the first time in years. I just hope a box is still available in December.