Are Savings Accounts a Thing of The Past?
On my childhood birthdays I’d look at the pile of presents at my Chuck E. Cheese party with a mix of excitement and anxiety. The excitement was always directed at the big boxes (which held cool things like EZ Bake Ovens) while the anxiety was caused by the small envelopes, which usually just held money.
Why my youthful disdain toward money? Because I had a savings account, that’s why. All the money I got for birthdays/Christmas/grade school graduation went straight to the bank, and my parents expected me to be happy when I exchanged a would-be shopping spree at Toys-R-Us for a deposit receipt and a lollipop. I was eight, and I was not happy.
Reflecting on those times now, I realize I’d be thrilled with a savings account as well-endowed as the one I had in fifth grade — its present-day counterpart is paltry, to put it optimistically. Though I know the importance of saving money, there are certain times when it seems almost impossible to save — a feeling that is shared by an increasing number of workers these days.
According to a new CareerBuilder survey: “Saving money is not an option for some workers, as one-third (33 percent) state that they do not participate in any programs such as 401(k), IRAs or retirement plans. One-in-three (30 percent) report that they don’t put any money aside into their savings each month, while 28 percent set aside $100 or less per month for savings and 14 percent save less than $50.”
The survey also reports that the number of workers living paycheck to paycheck has risen in the last year: 77 percent of workers report living paycheck to paycheck in 2010, compared with 61 percent who reported doing so in 2009.
Unfortunately, since we’re in the middle of a recession, it’s likely that many of us will be living with tight purse strings for the foreseeable future.
Yet according to Rosemary Haefner, vice president of human resources for CareerBuilder, that may not be such a bad thing, since living on a budget may ultimately make us more financially responsible. “The last 18 months have required some workers to tighten their day-to-day spending and make some adjustments to their financial futures,” says Haefner. “Our survey found that six-in-ten workers say that the recession has made them more fiscally responsible. Maintaining a budget is not only important now, but will better position workers – both personally and professionally – for the long run.”
When it comes to budgeting, workers reported using the following tactics to help make ends meet:
• Cut back on leisure activities – 54 percent
• Used coupons or shopped at discount stores – 48 percent
• Drove less to save on gas – 37 percent
• Cancelled cable and other subscriptions – 12 percent
• Used public transportation – 5 percent
Cut back on cable, carpooling to work and still stretching your paycheck thin? Haefner offers the following tips for getting the most out of your money and creating a livable budget:
Cut back where you can – That daily dose of Dunkin Donuts coffee can add up. Create a spreadsheet or keep a small notebook to track your expenses. At the end of the month, analyze where your money goes, and cut back where you’re spending unnecessarily.
Be saving savvy – While you may not be able to stash away a few hundred dollars each month, it’s still important to save what you can, even if it’s a small amount. If you tend to spend whatever is in your checking account, try setting up an automatic deposit into a savings account.
Maximize your benefits– Talk to your HR department to see if there are any benefits you’re not taking advantage of. Many companies offer perks like free museum admission, discounts at certain stores, etc. Also, if necessary, re-evaluate your benefits plan to make sure you’ve selected the right one for your budget.
For more on the recession and its effect on workers, check out:
Is Going Back to School the Right Move?
Workplace Fatalities Reach Record Low
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