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American Saver: Spring 2008
In this issue:
America Saves Milestone: 100,000th Saver Enrolls
With campaigns in an increasing number of communities in 22 states and the District of Columbia, America Saves enrollments continue to grow, recently exceeding 100,000.
Enrollments have grown annually since the first local campaign, Cleveland Saves, was launched in 2001 – from 1,147 that year to 29,866 in 2007.
Cleveland Saves and Tennessee Saves have each enrolled more than 10,000 Savers. Utah Saves, Arizona Saves, Charlotte Saves, Carolina Saves, and Philadelphia Saves have each enrolled between 3,500 and 5,500 Savers.
National campaigns have also enrolled tens of thousands of Saves, with Military Saves alone enrolling over 10,000 and securing an additional 10,000-plus Saver Pledges. In addition, more than 4,000 have enrolled as Black American Savers and more than 2,000 as Youth Savers through the Family, Career and Community Leaders of America (FCCLA). More than 10,000 have enrolled as American Savers through the America Saves website (www.AmericaSaves.org) or general brochures.
Enrolled Savers must develop a specific plan to achieve a savings goal and agree to implement this plan.
The most popular goal remains building an emergency fund, with 21 percent selecting this goal. Another 15 percent of Savers are trying to accumulate “investment savings,” 14 percent are saving for a home, 13 percent are building wealth by accelerating debt repayments, and 10 percent are saving for retirement. The median monthly savings goal is $50.
“We are heartened by these Saver enrollment figures,” said Nancy Register, national director of America Saves. “We know from independent evaluations that, in the aggregate, enrolled Savers actually save about half of all the dollars they have agreed to save monthly.”
Saver Profile: Tennessee Man Shares the Savings Message
Roy Crawford was browsing the Internet for saving information last February when he stumbled across the America Saves website. He was so impressed by the campaign’s savings message that he signed up on the spot, becoming roughly the 100,000th person to do so since the campaign started in 2001.
Although Mr. Crawford was already actively saving when he signed up with the campaign, the 57-year-old Blount County, Tennessee County Clerk said he and his wife came to savings relatively late, having grown tired of living paycheck-to-paycheck. They became followers of radio host Dave Ramsey, who preaches the benefits of savings and the evils of debt on his syndicated call-in show.
Mr. Crawford’s main goal in signing up with America Saves, he said, was “to find out more about the program so that I can help other people to become savers.” He already helps facilitate a savings program at his church based on the Dave Ramsey method, and he is planning to offer some type of savings program to his employees.
As County Clerk, Mr. Crawford said he sees people every day who “are over their heads with credit card debt.” “I think it’s important that we encourage people to build up savings, build up an emergency fund, so that they’ll have cash to pay for emergencies instead of using credit cards,” he said. He and his wife have gotten rid of their credit cards.
He said his current goal is to build up his own emergency fund from the four and a half months worth of living expenses he has already saved toward emergencies to between six and 12 months worth of expenses. His strategy is to have a percentage of his income automatically deposited in the account each month. “I have it taken out of my paycheck so I don’t even see it,” he said. “If I don’t see it, I don’t spend it.”
Once he reaches his emergency fund goal, he said he plans to direct his automatic deposits into a retirement fund.
He’s also a big believer in having a budget, “to know where your money is going.” When he and his wife developed their budget, he said, “the biggest shock to me was to see all the little things we were wasting money on.” Now, they use an envelope system. At the beginning of each month, they put the budgeted amount for various expenses – food, for example – into separate envelopes, and they don’t spend more than is in the envelope.
Having gotten a late start himself, Mr. Crawford’s message to others is to start young in order to be able to retire with dignity one day. “The earlier you start this, the better off you are going to be,” he said.
“The earlier you start this, the better off you are going to be.” --Roy Crawford, Tennessee Saver
April 2008
Money market account 0.63%
1-year CD 1.94%
5-year CD 2.75%
U.S. Savings Bonds
EE Bond 3.00%
I Bond 4.28%
Mortgage Rates
30-year fixed rate mortgage 6.12%
15-year fixed rate mortgage 5.70%
5-year adjustable mortgage 6.04%
Sources: The New York Times, “DataBank,” pg. BU 12, April 6, 2008 and www.savingsbond.gov, April 6, 2008.
Family Wealth Facts
Americans Assess Their Own Saving
Can’t afford to save 17%
Not saving enough 35%
Saving adequately 31%
Already met savings needs 13%
Americans Assess American Saving
Very inadequate 47%
Somewhat inadequate 32%
Somewhat adequate 14%
Very adequate 4%
Source: November 2007 Opinion Research Corporation survey commissioned by Wachovia and Consumer Federation of America.
Study: Americans Report Mixed Saving Progress
Nearly half of all American households believe they are not making adequate saving progress, according to a survey commissioned by America Saves and the American Savings Education Council. Conducted last February, the survey was based on the savings checklist reported on in the last issue of American Saver.
The good news from the survey is that nearly three-quarters of Americans (73 percent) report that they “spend less than their income and save the difference.” But little more than half (53 percent) say they save at least five percent of their income, and only 28 percent say that they save at least 10 percent of their income, as experts recommend.
More than two-thirds (71 percent) report that they “have sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit.” But little more than half of those who are not yet retired (57 percent) say they are saving enough for a retirement with “a desirable standard of living.”
One reason survey participants gave for inadequate retirement savings is the failure or inability to “save for retirement at work through a 401(k) or other contributory plan.” Only 55 percent of non-retired survey participants reported having such a plan.
Inadequate Savings Habits
Inadequate savings habits also help explain insufficient saving progress. For example:
* Only 62 percent of Americans report having a “saving plan with specific goals.”
* Only 49 percent report having a spending plan that allows them to save enough money to achieve the goals of their saving plan.
* Only 42 percent say they “save automatically through regular preauthorized transfers from checking to saving or investments.”
* Only 41 percent say they “save a portion of tax refunds, gifts, bonuses, or other financial windfalls.”
These findings are even more troubling considering people’s tendency to report their savings habits and progress as positively as possible. Comparing these survey results with hard data about savings suggest that responses to several questions reflect the personal optimism of respondents.
Income Differences Key
Past research has shown that age, gender, ethnicity, and education help explain differences in savings habits and progress. But this survey strongly suggests the income is a much greater influence on savings than these other four factors.
According to the survey, a large majority of households with incomes of at least $75,000, only about half of those with incomes between $35,000 and $75,000, and a small minority of those with incomes below $35,000 are adequate savers. For example:
* 81 percent of the high-income group, but only 34 percent of the low-income group, report saving at least 5 percent of their income.
* Among those who are not retired, 85 percent of those in the high-income group, but only 28 percent of the low-income group, say they are saving adequately for retirement.
* 85 percent of those in the high-income group, but only 36 percent of the low-income group, report having a savings plan.
While low income makes it difficult to build adequate retirement savings, it does not prevent developing a saving plan. Earlier research suggests that, regardless of income level, having a financial plan noticeably increases saving and financial stability.
You can use the checklist on the America Saves Week website (www.AmericaSavesWeek.org) to see how your savings progress measures up and to get tips on how to improve your savings practices.
Savings Tips: A Quarter Saved … is a Quarter Earned
No one know better than Savers how to find the extra dollar here or quarter there that, over time, add up to substantial savings. Here are a few of their savings tips.
I’ve always lived in homes with at least two levels, and I’ve found that it saves energy to open only the upper floor vents for cooling during the summer because cold air drops. Just the opposite occurs with warm air, so during the winter I open the downstairs vents and close the upstairs ones, allowing the heat to rise and distribute naturally.
--Carol J. Edlund, Ft. Walton Beach, FL
When our children were eight, 10 and 11, our family “paid” to watch TV for a year. Each day the kids could watch half an hour of their choice free. After that the charge was ten cents for a half hour program and 25 cents for an hour. When we watched as a family, we parents put in the 25 cents. We originally came up with the plan to cut down on television watching, which it did. But at the end of the year, there was more than $60 in the account, which helped us replace the old television set.
--Jeanne Vaver, Sheridan, IL
Contact your local utility providers to determine what hours are “off-peak.” By running your dishwasher, dryer, clothes washer and other appliances during those times, you will lower your utility bills.
--Matthew Alandt, Bainbridge Township, OH
Every summer, before school starts, the kids and I have a “does it fit, can it be dyed, and let’s repair it” night. We gather clothes and sneakers and sort through what to keep, clean, fix, and decorate. This gives the kids “new” clothes and makes them proud of their creations. We save about $200 and have fun together as a family.
--Martha Wallace, Stamford, CT
I stopped taking the newspaper. Since it is necessary for me to have a computer in my home, I read the news online. This has saved me $12 a month.
--Nancy M. Harrison, Salt Lake City, UT
Go to movie matinees when you want to see a movie, and visit the local museums on free days. Matinee movies are about $3 less per person, so for a family of four this can really add up. Also, local museums usually offer free or low cost admittance one day a month, which can provide an educational, low-cost excursion for the entire family.
--Nicole Miller, Milwaukee, WI
I keep a financial notebook that houses all my bank statements, bills, and pertinent financial information. Items are separated by type. Every bill – after I’ve paid it – and every piece of correspondence goes in the appropriate section. The notebook makes it easy to review my financial information, and it has helped me devise a debt elimination plan.
--Vanessa Tunstall, Warrenton, NC
A savings tip that I recommend to my Marines is to keep a small log book handy. Every time they get a soda, candy, haircut, etc., they should write it down in the logbook. A combination of little purchases can add up to be a lot at the end of the week. Some people don't know where the money goes when they only spend a dollar at a time.
--Jason Annis, Norfolk, VA
Do you have a tip to share? Send your savings tips to information@americasaves.org. If we select your tip for publication, we will send you a $25 check (the initial purchase price of a $50 EE Savings Bond) and an application for a $50 EE Savings Bond. We recommend purchasing a savings bond at a local bank or credit union. Please include your name, mailing address, and phone number so we can contact you.
News from Local Campaigns
Wisconsin Saves promoted Saves Week, February 24 through March 2, and the savings concept through newspaper articles and radio spots featuring Wisconsin State Treasurer Dawn Marie Sass. During Saves Week, banks and credit unions offered incentives, such as matching gifts and special interest rates, to encourage customers to open savings accounts.
Tennessee Saves Week was kicked off at the University of Tennessee-Chattanooga basketball game with an audience of 4,880. Volunteers at the game provided financial education to fans. During the week, local coalition members were recognized with a resolution at the Hamilton County Commission meeting, and a Piggy Bank Pageant was held at the Chattanooga Creative Discovery Children's Museum.
California State Senator Elaine Alquist recognized Saves Week by providing a Resolution from the State of California supporting the work of Silicon Valley/South Bay Saves.
The Pacific Marine Credit Union offered a new type of savings account to military personnel during San Diego Saves Week. Nearly 800 people opened accounts and deposited over $300,000 dollars.
Okaloosa Saves used the media to reach over one million people in the Florida panhandle during Saves Week. Among the many events held during the week was the Second Annual Piggy Bank Contest.
Wisconsin’s Northwoods Saves held a special youth “Roll Your Change” event for Saves Week in which 150 young savers participated. Winners received a $50 savings bond, provided by 13 financial institutions.
North Carolina Saves held events throughout the state for Saves Week, including events at free tax prep sites. Financial advisors talked with participants about saving and encouraged them to save part or all of their tax refund.
More than 200 military banks and defense credit unions accepted millions of dollars in savings deposits during Military Saves Week. Events held around the world included participation from all of the Navy Youth Centers and from many Army, Air Force, and Marine Corps sites. Military units large and small declared themselves “Military Saves” organizations. Special recognition goes to the U.S. Naval Mobile Construction Battalion Five, Detail Chinhae. Every member of the battalion took the Saver Pledge.
Miami-Dade County’s “Go Bus,” a special vehicle outfitted to travel to malls, libraries, schools and other locations to provide county services, offered savings information at more than 12 locations during Miami Saves Week. Over 300 residents visited to learn more about savings.
Louisiana Saves has brought together community organizations, churches, youth groups, financial institutions, and representatives from several offices of the state’s congressional delegation to plan the launch of the campaign.
Kansas Saves reached over a million and a half people – about half the state's population – through media and marketing efforts associated with Saves Week.
In Delaware, Dr. Jim O’Neill, founder and director of the Center for Economic Education and Entrepreneurship at the University of Delaware, was awarded the First Annual Saving Star during First State Saves Week. Over 75 campaign community partners and colleagues attended.
DC Saves reached more than 200 people in the area through Saves Week events. One highlight was the D.C. “Super Saturday” event that included seminars, credit counseling, tax preparation, and display tables where customers could open up low- or no-fee savings accounts.
Columbus Saves created a new video for Saves Week, set to the music “Oh Happy Day,” to deliver the message “You Can Build Wealth.” It is available for viewing at ColumbusSaves.org and on YouTube. Other Saves Week events included motivational talks and school assemblies, where piggy banks were distributed by the Franklin County Commissioners and County Treasurer. Over 400 people turned out to Saves events in Columbus during the week.
Central Iowa Saves organized nearly 50 events for Saves Week, which was endorsed by the mayors of Des Moines and Johnston.
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