According to Chief International Economist at Deutsche Bank, Torsten Sløk, nearly half of American households don’t save any of their money, leaving themselves with harsh economic consequences should the economy turn and they lose their jobs.
Over a million people lost their homes in 2008 due to the economic collapse, according to Foreclosures.com.
Since the recession, which began in December 2007, the US unemployment rate has risen 4 percentage points, changing the labor market substantively. The rate peaked at 10% in October, 2009, and has decreased substantially to 5.5% in February, 2015.
In a recent Bankrate survey, only 18% of Americans said they don’t keep a budget, and only 38% claim they could cover an unexpected emergency room visit expense or a car repair with cash. Most end up borrowing from family or friends, or put the fees on their credit cards.
Living paycheck to paycheck also has its consequences on retirement. Those who don’t save won’t have the capacity to retire, financial experts say.
According to the survey, only 52% of college graduates say they would save compared to 31% of those with a high school education.
Experts say, the lack of savings puts the whole society on a slippery financial slope, as the US economy is still trying to recover from the recession.
