The Foreclosure Report

72 Year Low In US Savings

The Associated Press reports on the American non-savings rate. "Americans spent more than they made last year, something they haven't done since the Great Depression. This time the trigger was good economic news, a booming housing market, which has made millions of American homeowners feel wealthier and thus more willing to spend with abandon."

"Government statistics released Monday showed they may have gone overboard with all of that spending, consuming all their after-tax income and then some. 'Americans seem to have the feeling that it is wimpish to save,' said David Wyss, chief economist at Standard & Poor's in New York. 'The idea is to put away money for old age and we are just not doing that.'"

"The weight of credit card debt, compounded by holiday shopping, suddenly feels heavier. That's because the home-heating bills that arrived in our mailboxes this month are up, in some cases, 25% or more. This double whammy is hitting people such as Katie Villegas of Baltimore as they open their latest bills. Her January bill for gas and electric clocked in at $326, higher than last year, even though she's turned down her thermostat 5 degrees and has used one-quarter less natural gas because of the mild winter. (Her bill would have been 41% higher than last year if she'd used the same amount of energy.)"

"She also owes $2,500 on two maxed-out credit cards. Villegas and her husband are juggling a mortgage, car insurance and grocery bills, all on their part-time salaries. (Her husband is looking for a full-time job.) The $560 in government aid they recently received for their energy bill helped their situation, but the holiday gifts that siphoned off cash did not."

"'We're still pretty stressed out,' says Villegas, who has two children to support. 'There are balances due that we don't have now.'"

"Last-minute holiday spending on credit cards is also showing up on this month's statements. In the five weeks leading up to Christmas Day consumers were expected to charge $77.1 billion on credit cards, up 4.8% from the year before.

posted by Ben Jones @ 10:15 AM