Americans Spending More Than They Earn on Average

So based on a goverment study, we are spending above our mean on average o.O That’s definitely not a good thing!

Based on the article Americans spend every cent – and more:

Friday morning the government will report on personal income and spending for November. For the last 19 months, the report has shown a negative savings rate. That means American consumers are spending more than they’re taking home after taxes. The savings rate was a negative 0.6 percent in October. In other words, the typical American spent $100.60 for every $100 of take home pay.

But things aren’t as grim as the article says based on Personal Saving Rate is a Misleading Indicator, which has a lot of truth in it:

To calculate the personal saving rate, government statisticians subtract taxes and spending from personal income. Income includes wages, salaries, interest, dividends, rent received, small-business profits, and some government benefits. Excluded are withdrawals from IRAs and 401ks, as well as capital gains. This is inconsistent with how most people measure their private fiscal health.

I think whether the situation is as bad as it sounded at first. We needs to go back to the most basic rule of personal finance, to keep ourselves under control :P Keep it in mind!!

Originally posted 2007-03-06 23:33:31. Republished by Blog Post Promoter