Here is a snapshot that I read about in the Washington Post, from a March 5 2006 article entitled "Our Financial Failings: Family Savings Look Scary Across the Board" by staff writer Neil Irwin:Meet the typical American family.
It has about $3,800 in the bank. No one has a retirement account, and the neighbors who do only have about $35,000 in theirs. Mutual funds? Stocks? Bonds? Nope. The house is worth $160,000, but the family owes $95,000 on it to the bank. The breadwinners make more than $43,000 a year but can't manage to pay off a $2,200 credit card balance.
That is the portrait of the median American household as painted by the Federal Reserve Board's Survey of Consumer Finances. The survey, which does not distinguish between sizes of families, nevertheless offers the most detailed look available of the balance sheet of U.S. households.
The Post asked a half-dozen financial planners to review the Fed data about what different groups of Americans own and what they owe.
. . .
They don't like what they see.
"This is awfully sobering," said Peter Speros, managing director of Sullivan, Bruyette, Speros & Blayney Inc., a wealth-management firm in McLean. "These numbers are just so much worse than I would have thought. It's a real eye-opener."
What about you? Where are you at? What's your personal or family balance sheet?
How are your goals in alignment with your behavior? It's what we do in our leisure time that determines where our focus is.
Now it's time to focus on what we can do to make and grow more money.
- Start saving! Do this in a group, do it with your family, do it with friends or a teacher: set a goal and stick to it, every month. Pay yourself first: pay your own savings before you pay for other bills. Preferably take it as an automatic investment so you don't see it, nor can you touch it.
Pay yourself first because you respect yourself and you respect your future: you will then start to make more because you demand more, and you will find other ways to grow money.
My recommended link: www.ingdirect.com - Start investing! Buy stocks, buy real estate, or buy a business. Alternatively, invest in your own side- or part-time business so you can take advantage of tax deductions. Regardless of what you do, start to build your assets (things that you own that make money for you).
My recommended link: www.sharebuilder.com
- Keep learning! Keep track of your progress! Read financial-related magazines, articles or books at least 2-3 hours a week and keep ahead of your financial statements (assets minus liabilities equals net worth).
Start a blog or do something public where you set your goals and keep yourself accountable to your 1-year, 2-year, 3-year, 4-year, 5-year, 10-year, 15-year, 20-year, 30-year and 50-year goals. Put compound interest and dollar-cost averaging to work for you!
(Check any of the online calculators to see how quickly money grows for you over time if you keep on compounding)
My recommended link: www.growyourfunds.com
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Thanks Monica, for drawing these sobering facts to our attention. Young folks can grow quite a nest egg without putting a whole lot aside at this point. Even when you're a little older, like me, it is never too late to set aside funds. So, as you say, "saving is one way of being good to me!!"
Posted by: Robyn McMaster | May 28, 2006 6:05 AM | Permalink to Comment