"Americans are taking significant steps to improve their financial situation. More than half (56%) are taking on more responsibility at work, almost two-thirds (64%) have started saving more and spending less, and an additional 29% plan to cut spending."
"Americans are helping their family members financially – even though they may also be struggling themselves."
"Many Americans still find themselves close to financial ruin should they lose their job: 45% could not take care of expenses for more than a month, and 65% could not do so for more than three months."
Insufficient emergency savings/cash reserve adds to the stress. "Americans who consider themselves to have an adequate personal safety net are twice as likely to feel they have achieved the American dream as those who do not (57% vs. 24%)."
One disturbing finding: "Though many are struggling to make ends meet, needs and expectations continue to increase. More than half (58%) of Americans believe that the bar is constantly rising in terms of the basic necessities in life. Three in ten (29%) feel more pressure to buy more and better material possessions." (bold added)
What to do?
- Recalibrate your expectations! It's time to downsize and simplify your life; get off the consumption escalator. If all your friends are on consumption treadmill, it's time to start expanding your circle of friends to people who have a healthier (for themselves and the planet) perspective on the American Dream. Start by reading Greg Mortenson's book Three cups of tea (see related blog). Check out websites about downsizing your consumption and simplifying your life.
- Start or build your emergency savings. A great place to begin is with an online savings account. Check out some options at:
- Ally Bank http://www.ally.com/ (1.09% 11/22/10)
- Sallie Mae Bank (www.salliemae.com) (Nov. 16, 2010: 1.3%)
- Discover Bank (http://www.discoverbank.com/): 1.25%