EHE News
Get ahead now with America Saves
The nation's savings rate is abysmal - measured at minus 1 percent for 2006. That means as a whole, Americans spent 1 percent more than they earned last year. According to the Commerce Department, this savings rate is the lowest since the Great Depression.
It wasn't always this way. In 1984, the national savings rate was more than 10 percent. Today, most Americans don't have enough savings for an emergency fund (which should amount to three to six months of expenses in easily-accessible accounts), much less for retirement or other long-term savings goals.
America Saves is a national campaign to encourage individuals, especially low- and moderate-income households, to save money, reduce debt and build wealth. More than 61,000 people have signed up to take part in America Saves since its debut in 2001.
America Saves has two major goals, said Caezilia Loibl, family financial management specialist for OSU Extension Family and Consumer Sciences and an assistant professor in the College of Education and Human Ecology, Department of Consumer Sciences.
First, it encourages individuals to save a certain amount each month toward a specific goal - to buy a home or a car, for example, or to build an emergency fund or save for retirement. It also aims to increase accessibility to savings accounts, most of which charge fees for accounts with low balances. "That discourages people who don't have a lot of money from starting to save," Loibl said.
She recently surveyed people participating in the Columbus Saves chapter. Of the 178 people who responded, the most-often saved amount was $50 a month, she said. Some people saved significantly more, which skewed the average monthly savings up to $137 a month.
In addition, Loibl was surprised to find that study participants who had set a specific savings goal for themselves tended to save less than those who simply promised themselves to build their savings. "I was surprised," Loibl said. "But it may be better to say, 'ttle bit every month' than to set a specific goal for yourself, because if you don't reach that goal, you may feel like giving up. But the most important thing to do is to pay yourself first -- whenever you get a check, put some money in your savings account before doing anything else."
Individuals can sign up to join America Saves on its Web site. In doing so, they get a subscription to the quarterly American Saver newsletter and access to volunteer financial planners recruited by the Financial Planning Association.
In addition, 53 local "Saves" organizations have been formed throughout the nation, with banks and other financial institutions partnering to offer free or low-fee savings accounts.
Ohio's Cleveland Saves has nearly 9,000 Cleveland Savers. Elsewhere in the state, OSU Extension Family and Consumer Sciences has taken the lead or partnered with other organizations to form other local campaigns. They include:
- Columbus Saves, (614) 866-6900
- Hancock County Saves, (419) 422-3851
- Miami Valley Saves, (937) 853-1605
- West Central Ohio Saves, (419) 222-9946
- Wayne County Saves, (330) 264-8722
- Fairfield County Saves, (740) 653-5419
"We're also getting groups together in other parts of the state, but they're still at the beginning stages," Loibl said. "All in all, between 10,000 and 11,000 Ohioans are participating. The local campaigns are a wonderful tool to build networks of people and institutions througI'll save a lihout a county who want to work together to help people build wealth and reduce debt."
For more information on family finances or the Saves programs throughout Ohio, contact Loibl, (614) 292-4226.
Writer: Martha Filipic, OSU Extension Technology and Communications
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