Spendthrift Americans Grapevine Exaggerated; Consumers Reports Indicates More Savings than Credit Card Debt

According to experts, despite of credit card balances coming down through a recession that hit in 2007, the fundamental behavior of consumers of not saving enough didn’t change. As reported by the Department of Commerce, the total savings of average household in 2012 were 3.9%, which is considered better than only a 0.9% of Americans who were saved in 2001. However, it is less than the 5.4% savings rate in 2008.

To answer why most Americans are broke despite of “savings” figures being high, the fact is that the country is broke, whether in student loan, mortgage, or credit card. The thumb rule is to save at least 6 months of savings, but most people don’t have even a single penny. Men are more likely to have an emergency fund that outweighed their credit card bill than women, the ratio being 60% to 49%. On the other hand, a quarter segment of all income levels has reported a high credit card debt than savings.

Americans with an income level of more than $75,000 are less likely to have no credit card debt or savings as compared to people with income of less than $30,000. Surprisingly enough, 28% of the low income earners have no reported credit debt, no savings, while 7% of high income earners also reported no credit card debt or savings. For the balance segment of American consumers, there is a fine division between people who are carrying their debt well as well as savers who are against any sort of debt and more into savings.

However, irrespective of how much money a person is earning, it is important to save money in the banks and cut on irrelevant expenses to get going well without being broke.