A US deficit in savvy savers

By

Despite the booming economy, a surprising half of American households have less than $1,000 in net financial assets and modest or no wealth, says a new study.

The census-based economic analysis was released last week by the Consumer Federation of America (CFA), a nonprofit advocacy group, and Primerica, a Citigroup Inc. unit. Their surveys found that a high number of Americans may underestimate the power of saving.

For example, 40 percent of Americans in moderate-income households believe they are more likely to accumulate a $500,000 nest egg by winning a lottery than by socking away savings. And asked how much $50 invested weekly at a 9 percent annual yield would be worth after 40 years, the median response was $239,400 - a huge miscalculation from the actual figure: $1,026,853.

Recommended: Could you pass a US citizenship test?

A main reason for the low cash assets, according to the study, is a "buy first, worry later" attitude. It found that the median US household carries $8,800 of debt, $3,000 of which is devoted to paying off credit-card bills and other consumer loans.

The survey, however, does underestimate the financial worth of the average US household by not including 401(k) or other qualified retirement-plan savings.

For tips on managing your money, check out the Primerica/CFA Web site: (www.consumerfed.org).

(c) Copyright 1999. The Christian Science Publishing Society

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...