My friends over at GoBankingRates.com sent me this infographic, which shows a few interesting facts about the U.S. Savings Rate. The first box shows the U.S. household savings rate dropped from 6% in 1993 to less than 1% in 2006. However, some say that the savings rate calculation is faulty. Regardless, it is a good reminder that saving is fundamentally important to your finances, and despite what the data is saying, your personal savings rate is something you should keep your eyes on.
The second box shows that Americans tend to save a larger percentage of their disposable income in times of economic turmoil — nothing surprising there. But a safer policy is to keep your debt level low, make sure you have a healthy emergency fund at all time, and have a good plan to deal with financial emergencies.
The third box shows recent mortgage, refinancing, and home improvement borrowing activities. These graphs show our tendencies to chase returns. As the biggest housing boom was happening, more and more people poured money into the market — either in fear of not being able to get into a house if they waited too long, or didn’t want to miss out on the bull run — unfortunately, we all know what happened next.
Without further ado, here’s the infographic…
This infographic was created exclusively for Moolanomy by the good folks at GoBankingRates.
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.