|
As
Savings Begin To Fall
by
Carl Hampton
10/17/2006
As more and more people are becoming
dependent on credit cards and borrowing,
saving accounts have not fallen back. The
Credit Union National Association (CUNA)
collected statistics that showed that from
January to August of 2006, the rise was
1.8%. In comparison at the same time in
2005, savings rose to 2.5%.
There has also been a shift in credit unions
from savings to certificates of deposit.
People have been taking advantage of
certificates of deposit since the Federal
Reserve has raised it's short term interest
rate to 5.25%. The Commerce Department has
shown that after tax income minus all
expenses leave the savings rate in the
negative territory since the spring of 2005.
One of the major factors for this fall out
is the rise in housing costs. With the rise
in equity people find less reason to save
and more reason to borrow. Statistics show
that within the households across the nation
the savings rate was at negative 1% in the
first quarter of 2006. For those who were
extracting from their equity the rate was
negative 15%. The big issue here is that
savings must increase so that the economy is
prepared for the retirement of the baby boom
generation. If this fails to happen there is
going to be a real problem that we may never
be able to repair. Most baby boomer's have
already come to terms with the fact that
they are going to have to work a lot longer
than they had hoped.
Have an opinion or a question you would like
me to answer, then write me!
http://www.CarlHampton.com
|
