The personal savings rate in the United States, which is the amount of income left after taxes and household spending, has reached some significant milestones.
In April, when much of the country stayed home to avoid the COVID-19 pandemic, the rate hit a record 32.2%. People were saving as much money as they could in a time when the future seemed uncertain. While the rate has slowed considerably since then, it hasn’t quite returned to its pre-pandemic rates.1,2
While it is prudent to take certain financial precautions in difficult times, it’s also important to remember that a good financial strategy takes good times and rough times into account. As I am fond of saying, "It's not how much we make, but how much we keep that matters." It is not surprising to learn that most lottery winners are broke five years later. I am happy to see that our Safe Money choices have worked so well.
We are not out of the woods as far as COVID-19 is concerned, but we’re also at a point where life after the pandemic is being considered -- and may mean dramatic changes. This future life is being visualized not just by scientists and officials but also by financial professionals like me. It may be time to have a conversation about your overall financial strategy, with the days ahead firmly in mind.
I look forward to having a conversation with you about your cash position and the choices ahead for you. Like most of you, we are not yet venturing out nor inviting visitors. However, we are learning the "new normal" of Zoom and simple telephone discussion. Let’s schedule a conversation about this at your earliest convenience.
1. Time.com, January 7, 2021
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite, edited by GH vanValkenburgh, to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with VANCO Financial Group. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Personal Savings Rate
January 25, 2021