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The Saving Money Guide: Saving Money Strategies That Work
Why Do We Save Money?
The basis of saving money is different for everyone. Most of the reasoning on why people save money comes down to security. Nobody can actually predict the future, yet. As a result humanity has the intent to save money.
We save money so we can become financially secure and provide a safety net for the future. We don’t know what the future holds about our lives. By saving money, we are trying to financially prepare ourselves for the future as best we can.
My Top Saving Money Strategies
- How To Save Money On Housing Costs – Simple tips to save money on housing recommended by a Realtor. Learn common ways to save money on housing that come up during the home inspection process.
- Unusual Things I Stopped Buying To Save Money – An exhaustive list of 21 unusual things I stopped buying to save money. Learn how to use the savings to ultimately build household wealth.
- How To Save Money On Groceries – Need to slash your grocery budget and save money? Check out these 33 ways how to save money on groceries. Save hundreds per month by using these tips.
- Save Money With Free Stickers – Free sticker directory with over 440 different types of free stickers from brands, companies, and personal causes organized by alphabet. Check them out!
- Frugal Living Strategies: 185+ Frugal Living Tips – Over 185+ frugal living tips. Learn how to live frugally today with tips for restaurants, shopping, college, insurance, transportation, and your household.
When Did We Stop Saving Money?
There is no question that more people these days should be saving money.
And, Americans used to save money and part of their income. That was the case back in the 60s and 70s.
- Even up until the first Regan term, 90% of households were only saving 10% of their income. From, that point forward, household savings rates have declined.
I have to believe that what I do read in the history books is true; it was just easier to live every day life back then.
A large majority of households in the 60’s and 70’s were one income.
American households earned income, saved income, and then purchased. That was the equation and how it worked.
Earn Income + Save Income = Purchases
That is not the case today. The equation has changed.
Looking for more articles about saving money? I have a full list at the bottom of this page.
Why Don’t We Save More Money?
There are several reasons for this however the underlying theme has to do with our lifestyles and everyday choices we make. Some of the reasons are listed below:
1. Incomes Stopped Growing
One reason that is partially to blame is income growth. From 1960 to 1973, income per capita grew at an annual rate of 3.2%. But in the following two decades, income growth rate fell by half to just over 1.0% annually.
Income did pick back up in the 90’s again. However, Americans didn’t return to saving. They never restarted saving their income. When the 90’s hit, that changed everything.
2. The 90’s.
The 1990’s were good years for economic growth for the United States. Starting in 1995, a housing boom occurred. Prior to 1995, not a lot of housing stock was being built for single families.
And for families trying to increase their savings, this was a very difficult thing to do now.
Starting in the late 1990’s consumers really began to find their voice and their way. They were starting to live for the moment, and not plan or save for the future anymore.
Even to this day, we still live in a consumer-driven society. When we see the newest iPhones, gaming systems, or automobiles, we must have them now. Our immediate gratifications we have must be satisfied and we don’t have time to wait or save income for that matter.
3. Easy Access to Credit
With access to easy credit, people no longer followed the equation of:
Earn Income + Save Income = Purchases
Households were able to bypass the second step.
They no longer needed to save income to make purchases because of this thing called credit. What also occurred with easy access to credit was that saving and planning for the future was easy reduced or eliminated. People were able to make up with decades of flat wages with credit card and debt purchases.
4. Keeping up with the Jones
Another thing happened with access to easy credit was the ability to have a better life now and pay for it later on down the road. A lot of households started buying new houses in the suburbs, fancy new cars, and furniture to fill those new houses.
Many saw their best friends and neighbors leave well established neighborhoods in search for this better “wealthier” life.
That transition of lifestyle, made a lot of households think “hey if the Jones can move out to the suburbs, build a new house, and buy a new car, then we can do that too.”
I like to call this “Contagious Consumerism” but it is also known as “Keeping up with the Jones.”
Living a Jones lifestyle isn’t cheap.
A lot of households were faced with higher costs for their new houses, higher taxes, and higher utilities.
These were things that they may not have initially been planning on or may never have had at their former neighborhoods.
5. Debt Crisis
Keeping up with the Jones also gave rise to something new as well. Enter household debt.
For a lot of these families, their financial equation changed. It was now:
Earn Income + Purchases = Debt Payments
Wait what happened to saving income?
In this equation, many households never achieved the step saving income.
The answer to that is because there was none left over at the end of the month. All of their income was committed to paying down credit that occurred due to flat wages they experiences for decades.
Households still have debt today.
The same trend exists. It’s not as visible today because the economy and stock market are charging ahead. But, subprimes are back, mortgage rates are low, and house prices are very high. It’s the perfect storm.
A lot of people are overextended and unable to pay back all of their loans.
We saw this in 2008 with the implosion of the housing market and subprime lending.
Now 11 years later, we are repeating the same pattern. History repeats.
Many households are overextended. Some cannot pay back the total balance of money borrowed.
As a result they become hostage to their monthly interest charge and their balances continue to grow. Their financial troubles and that become deeper and deeper.
Money Saving Strategies
Even with all of these obstacles of the past, there are easy ways to save money. Take a look at my top money saving strategies below:
All Saving Money Articles
- Back To School Shopping Hacks That Will Save Your Family Money
- Ways To Organize Your Household To Save Money And Time
- Family Fall Activities To Do With Little Or No Cost
- Paribus: The Only Shopping Assistant You Need
- 271 Cheap Meal Recipes For Large Families
- Ibotta: How To Save Money With Ibotta
- 125 Restaurants Where Kids Eat Free or Cheap
- Book Review: “Dirt Cheap Adult” by Amanda Kintz
- CIT Bank Savings Builder: Interest Rates To Grow Your Savings
- Ebates Review: How To Cash In With Ebates
- Cord Cutting: Best Alternatives To Cable TV
- 120+ Cheap Date Ideas on a Budget
- Top Brands for Best Rechargeable AA Batteries
- How Does Prime Pantry Work? [New Fees!]