Wednesday, October 30, 2013

Should the USA Have a National Savings Day?

In 1988 South Koreans saved 24.7% of their income, I can only imagine what the USA's would have been (if I had more time today, I'd research that statistic). I know in recent years Americans have actually had a negative savings rate, spending more than they take in. Sadly, the South Koreans are tracking the west, with the savings rate dropping to 3.4% in 2012.  This story pulls forward an idea from my memory during the Great Recession we have just lived through.

The US Government allows income tax breaks on monies placed in retirement accounts, college 529 plans, and health savings account.  Why not extend that idea to savings accounts for emergencies?  Just the idea of a tax break may encourage some to squirrel away money for a rainy day.  We all know the economy goes up, then it goes down, it's a roller coaster at times.  Wouldn't a nest egg, of some sort, make that ride a bit easier for our citizens?  Okay, this is a bit beyond the South Koreans Savings Day - but still, I'd love to see a message out of Washington, D.C. that encouraged us to save and not just spend.  Yes, a collective gasp would be heard on Wall Street -- but it is the common sense advice of this frugal American.

Our household savings, at a rate which is closer to the South Koreans than the Americans, has allowed us to weather the ups and down of a volatile market and the ups and downs of a contract dispute.  That cushion prevented us from falling into crisis.  I'd love more more people to have that peace of mind.  Sure, we can say "it won't happen" or "people simply can't save".  And then I think of my 92 and 91 year old grandparents, still thriving today.  That generation pulled together and did amazing things.  Why can't we?

M. Gustafson Gervasi, 2013 -- Taken a few years back, my grandfather climbing into a Fire Truck at the Department he volunteered at for several decades.  The Greatest Generation -- they just keep on going!

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