By CARLIE KOLLATH / NEMS Daily Journal
A breaking news alert from the Washington Post blew me away last week and for the wrong reason.
What was so important that the esteemed paper had to send an e-mail alert, causing me to drop everything and see what was happening? Did an important person die? Did someone find a solution for our economy?
The alert: A majority of Americans now say they are worried about making their mortgage or rent payments, poll finds.
Seriously? It took an official poll for the Post to figure that out?
Granted, the story went into how the economic concerns will factor into Tuesday’s midterm elections.
But still, an informal poll of my friends gave me the same result as the Post’s poll.
Money is tight. We’re trying to pay off debt and stash away cash in case something happens with our jobs. That means we don’t have as much disposable money as we had before our economy went south and now when we look at our bank balances, they are a lot lower than we’d like.
According to a survey in Consumer Reports’ Money Adviser, Americans’ financial situations have changed quite a bit in the past two years.
In 2008, according to the Pew Research Center, 38 percent of people said they were living comfortably. In 2010, the number dropped to 30 percent.
• In 2008, 32 percent were able to meet basic expenses with a little left over. This year, it dropped to 30 percent.
• In 2008, 22 percent were able to just meet basic expenses. It grew to 27 percent in 2010.
• In 2008, 7 percent couldn’t meet basic expenses. The figure grew to 11 percent in 2010.
Because of the uncertain economy, financial advisers are emphasizing emergency funds and savings more than ever. Americans appear to be listening.
Savings as a percentage of disposable personal income went from 2.1 percent in 2007 to 5.9 percent in 2009, according to the federal Bureau of Economic Analysis.
Here are some tips from Consumer Reports about how to save money.
• Set a goal. Ideally, you should have six months of living expenses in savings.
• Figure out how to get there. Cut discretionary spending. Consider getting a second job. You want to have the money in savings before you need it.
• The advice is mixed on whether you should pay off debt first or put it into emergency funds. Some advice says paying off credit cards will save you money and give you extra money if needed later. Other advice says your credit card may get canceled later and it’s better to have cash on hand.
• If you make regular contributions to a retirement fund or children’s college fund, consider delaying those until you have an adequate emergency fund. But, don’t lower your 401(k) contributions required for your employer’s full match, if it’s offered.
• Have money taken directly from your paycheck and deposited into a separate account.
• Keep your emergency money where it is safe and you can access it safely. Look at savings accounts instead of certificates of deposit and mutual funds.
Hopefully, these will help you reduce the amount of time you spend stressing over your mortgage or rent payment.
Contact business reporter Carlie Kollath at (662) 678-1598 or firstname.lastname@example.org.