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    Savings Rate Highest Since Reagan

    https://www.cnn.com/2020/04/30/inves...rve/index.html

    Some more not-terrible news about all this COVID-19 mess -- Americans have amped up their savings rates, up above 13% from about 8%. Sure, it's out of fear, and it probably won't last.... But the last time folks were putting money away like this was almost 40 years ago. Everyone's reduced spending is also probably helping (down an average 7.5%), though if course many have also had a reduced income.

    Nothing truly remarkable, in all... But interesting nonetheless.
    "Praestantia per minutus" ... "Acta non verba"

    #2
    I saw this. Good news in a way I guess.
    But, interest rates are on the floor.
    And, the longer this drags on the higher credit card balances are going to get.

    Brian

    Comment


      #3
      Makes sense that people are saving more. Everything is closed and you’re stuck at home. There’s nowhere to go to spend money. Our spending was down about $1,000 last month compared to April 2019. Once the world reopens, people will start spending again.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #4
        Yep, you're probably right. Definitely a mixed bag of good-ish news. You never know, people might realize it feels good to have some financial cushion in their life and at least maintain a bit more of an emergency fund... I know having a healthy amount in savings has always helped me sleep better.
        "Praestantia per minutus" ... "Acta non verba"

        Comment


          #5
          Thinking about it this morning, we've actually been piling alot of money into savings lately, though not really in response to the COVID mess.

          I recently (finally) got some overdue per diem payments (~$40k), we sold DW's car (~$15k) ahead of our upcoming move that's racing up on us next week (!!), and we've also been selling some stuff around the house (~$3k). Add to that ~$10k I pulled back from our taxable brokerage's MM and a ~$16k bonus that I'll receive in a few days, and we'll have added the equivalent of over 50% of our normal annual income into savings between mid-March to mid-May. Most of that is headed toward buying our next house in Jul/Aug, and replacing ~$30k in expenses I had to cover out of savings while I was deployed (long & aggravating story, but a large source of the huge per diem payments). So perhaps I'm juicing these stats a bit myself...
          "Praestantia per minutus" ... "Acta non verba"

          Comment


            #6
            From the article:

            They lead with "Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen since the first year of Ronald Reagan's presidency."

            But then they go on to say:

            "the savings rate surged to 13.1% in March -- up from 8% in February

            Still, consumers may be saving more because they are spending less -- a lot less, in fact.

            The BEA also said Thursday that consumption expenditures fell 7.5% last month"

            That pretty much supports what I said. Folks aren't intentionally saving more suddenly. They're saving by default due to reduced spending. I don't think it has anything to do with people being "nervous about the state of the economy".

            I doubt it will last.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              Originally posted by disneysteve View Post
              FFolks aren't intentionally saving more suddenly. They're saving by default due to reduced spending. I don't think it has anything to do with people being "nervous about the state of the economy".
              I think that also speaks to the source's inclination to advance the narrative of choice. Not to say that CNN is the only one that does (nearly all major news outlets do it), but you just need to read news articles with a clear understanding of the perspective/narrative from which they're writing.
              "Praestantia per minutus" ... "Acta non verba"

              Comment


                #8
                Originally posted by kork13 View Post
                I think that also speaks to the source's inclination to advance the narrative of choice. Not to say that CNN is the only one that does (nearly all major news outlets do it), but you just need to read news articles with a clear understanding of the perspective/narrative from which they're writing.
                Yep. I love CNN. It's my #1 source. But you always need to read beyond the headlines. No matter whose headlines they are, they are designed to garner clicks, views, eyes. The devil is always in the details.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #9
                  Originally posted by disneysteve View Post

                  Yep. I love CNN. It's my #1 source. But you always need to read beyond the headlines. No matter whose headlines they are, they are designed to garner clicks, views, eyes. The devil is always in the details.
                  I'm not a fan of CNN or any of the major news networks.
                  They seem more concerned with pushing an agenda and getting ratings than facts and truth.

                  It's hard to find unbiased and accurate news from anywhere unfortunately.

                  Brian

                  Comment


                    #10
                    Originally posted by bjl584 View Post
                    It's hard to find unbiased and accurate news from anywhere unfortunately.
                    News is a business. Whether it's network TV, cable, internet, newspapers, magazines, or whatever, they all live or die by ratings, sales, and subscribers. There's no such thing as "unbiased". And especially in today's world where cold hard facts, truth, and irrefutable evidence is no longer accepted or believed by a significant percentage of the population, it has become a huge challenge to be in the news business.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                      #11
                      "Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen since the first year of Ronald Reagan's presidency"

                      I wonder who they polled, or if this is just an assumption. I'm going with the latter.

                      "At a press conference on Wednesday, Fed chair Jerome Powell was asked about what savers should do since rates are at zero. He conceded that for people "really just relying on their bank savings account earnings, you're not going to benefit from low interest rates."

                      Lol. Yeah, remember the good ol' days when savings rates were like 0.2%?! Man, those were high times getting an extra $10/month in interest on $200,000 in the bank. I was definitely reliant on that life-altering income! lololol. Rates on savings accounts have been an absolute joke for the last 2 decades at least.

                      Comment


                        #12
                        It's been crazy what the fed has been doing. They've been keeping housing prices way to high and people have no idea what it would be like to afford a house at say 6% interest.
                        LivingAlmostLarge Blog

                        Comment


                          #13
                          Originally posted by LivingAlmostLarge View Post
                          people have no idea what it would be like to afford a house at say 6% interest.
                          I always forget the exact figure but I think our first mortgage when we bought our house in 1994 was over 8%.
                          Steve

                          * Despite the high cost of living, it remains very popular.
                          * Why should I pay for my daughter's education when she already knows everything?
                          * There are no shortcuts to anywhere worth going.

                          Comment


                            #14
                            Originally posted by disneysteve View Post

                            I always forget the exact figure but I think our first mortgage when we bought our house in 1994 was over 8%.
                            We bought our house in 1994 too and our interest rate was 7.2%.

                            Comment


                              #15
                              Originally posted by Thrif-t View Post

                              We bought our house in 1994 too and our interest rate was 7.2%.
                              A quick search showed that rates were on the rise in 1994, starting the year around 7% and ending the year over 9% so it partly depends when (and of course where) you purchased.
                              Steve

                              * Despite the high cost of living, it remains very popular.
                              * Why should I pay for my daughter's education when she already knows everything?
                              * There are no shortcuts to anywhere worth going.

                              Comment

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