As once-healthy companies go under and surviving companies cut vast swathes of their workforce, the personal savings rate has gone up. While American savers were averaging 1% or less from late 2004 to early 2008, the average personal savings rate has–skyrocketed?–to over 3% in the final quarter of 2008 (this chart gives a great visual).
This is a real improvement over the first quarter of 2005, when the national average dipped below 0%!
How have you changed your own saving habits in the recession? Are you saving more? Is it going toward retirement or into short-term savings (savings accounts, cds, etc)? What are you giving up to save more? Or are you finding ways to make more money?
Fortunately, our earnings haven’t been affected so far. Our debt repayment is chugging along, but we’re putting the money into savings right now, since the student loans are deferred. Like Frugal Dad’s safety net method of debt repayment, this means we have the money as a backup in case there’s an emergency in the meantime. It also picks up a little interest.
I asked others on Twitter and got the following responses:
Christian PF – “I am saving more and trying to build a bigger rainy day fund by minimizing luxuries.”
The Passive Dad – “Saving much more in the last year and making do with what we have. Home projects vs. hiring someone to build it.”
Remodeling This Life – “saving more, yes. not giving up anything since am making more $$ to save so all that has changed is more money coming in to save”
Money Monk – “yeah, I save 30% of my income”
Centsible Life – “saving more by pre-paying debt. We -expenses, and +income by me getting 2 part-time jobs (and blogging!), before I was a SAHM.”
Poorer Than You – “Less likely to make extra payments on student loans, saving instead to avoid going into credit card debt.”
Meg from Frugal Wiki – “We’ve been spending more and more carefully but not because of the recession per se.”
P MacDougall – “Recession has not changed my savings habits. Nothing to give up until its time to move into my car. Which is years off :)”
Graduated Learning – “Still spending like I used to (which is not much). spending more paying off student loans.”
Moolanomy – “Didn’t change a thing. Keeping my long term strategy.”
Clever Dude – “We’ve definitely been saving more and spending less, not even paying down debt faster until we figure out a plan.”
Pecuniarities – “Definitely. I’ve always been frugal but allowed little luxuries like buying used books. Now, it’s just necessities.”
What about you?