Saving Is Now “Hoarding”
Especially when we keep that money in our checking accounts.
I was listening to The Other Washington podcast yesterday—it was an episode about homelessness in Seattle, with the devastating statistic that every time rents rise by $100, homelessness rises by 15 percent—and they also brought up the fact that 70 percent of Americans have less than $1,000 in their savings account.
But if we do save more money, according to USA Today, we’re “hoarding” it.
Americans are hoarding money in checking accounts
Enjoying a steady job market but reluctant to spend freely due to economic uncertainty, a wide swath of middle-class Americans are hoarding money in banks.
Total bank deposits rose 6.6% last year to $10.7 trillion, extending steady growth seen in recent years, data from the Federal Deposit Insurance Corporation show.
What should we be doing with this extra money? Spending it, of course!
While saving is deemed a personal finance virtue, would-be shoppers holding tightly onto their budgets can also be a drag on the economy. U.S. consumer spending was relatively flat, up only 0.1% in May, the latest data from the Commerce Department show. Retail and auto sales have also been sluggish.
We’re such a drag, with our “not buying new cars” lifestyles. But sure, I get it. Retail sales are flat, food sales are flat, this year’s Amazon Prime Day was… no, wait, it was the biggest sale day in Amazon’s history:
Amazon’s Prime Day sets company sales record
So we are buying stuff. A lot of Instant Pots in which to cook our money-saving bags of beans, maybe. But we’re also holding on to more money, and keeping it in our checking accounts instead of in savings, CDs, or other investments. Which, as USA Today explains, might be because interest rates are crap and the stock market—well, you remember our recent discovery that “stocks are more expensive than they’ve been at nearly every other point in history.”
Are Stocks Too Expensive to Be Valuable?
But we might also be hanging on to more money in our checking accounts because we know our rents are going to rise by $100 in the next year or so. Or because we’re anticipating some type of volatility in either our income or our expenses—remember that in 2014, 30 percent of Americans saw their income either rise or fall by 25 percent, thanks to job churn.
Or maybe we’re just keeping all of that money in our checking accounts so we can make those one-click purchases on Amazon.
Also, I’m going to make another donation to Seattle’s Mary’s Place shelter this afternoon.
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