Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
Poll Americans value paying down debt over saving
WASHINGTON (9/7/11)--Is it better to be debt free or have a robust savings account? Roughly 89% of people polled in August by the National Foundation for Credit Counseling (NFCC) say it's better to pay down debt, but NFCC says the answer is "both." Today's savings rate is 5% of disposable income, better than the 1% before the last recession hit, but much less than the 8.3% registered in January 1959, when the first savings report was made by the Bureau of Economic Analysis, said NFCC. History indicates that the rate of savings increases during difficult economic times as consumers cut back on purchases, and it declines during good economic times, said NFCC. Consumers use access to credit not only as a convenience but also as a piggy bank. "Credit replaced savings as the family's savings net, with some arguing that saving was unnecessary since they could charge or borrow their way out of any unplanned event," said Gail Cunningham, NFCC spokesperson. Now that consumers have learned their lesson about overspending, they must focus on saving in five key areas, said NFCC. The five areas:
* Rainy day fund for everyday emergencies such as home and vehicle maintenance, insurance co-pays and deductibles; * Income replacement account to sustain members if they experience job loss, major medical event, divorce and so on; * Down payment for a mortgage; * Known future expenses such as education, vehicles and vacations; and * Retirement.
"In bad times, people save out of a fear of tomorrow, and in good times they spend as if there were no tomorrow," said Cunningham. "To turn this savings/spending cycle into financial stability, consumers should recognize the unarguable importance of savings and develop a systematic plan to meet their personal savings goals." Credit unions can gear their promotions to each area to attract members' savings and provide information about financial goal setting.


RSS





print
News Now LiveWire
At @FTC request, court halts operations of an alleged debt-relief scammer calling itself “FTC Credit Solutions.” http://t.co/qMsDBmKExH
2 hours ago
.@daytondailynews : The secret is out about #creditunions http://t.co/Aqu3pFTROV @DayAirCU @CODECreditUnion
2 hours ago
.@CUNA's @Nussle on @SenatorReid :(2of2)On behalf of more than 102M #CU members,I thank him 4 his leadership over the yrs/wish him the best.
4 hours ago
.@CUNA CEO Nussle on Sen. Reid’s decision not 2 seek re-election (1of2): Sen. Reid has a long history of #CU support throughout his career.
4 hours ago
#Jobless claims duck under 300K for 3rd straight week #Market #Economy http://t.co/jOsZWf9HNJ
4 hours ago