AICCCA Advises -No Savings Means
Walking Financial Tightrope Without a Net
Fairfax, VA - January 5, 2006 — For the first time since the 1930s, Americans saved at a negative rate for the entire year. The Commerce Department recently reported personal savings at minus 0.5 percent for 2005. AICCCA advises consumers to begin saving now even if it is only a few dollars a week.
"Without a savings cushion to break the fall, a financial crisis such as a job loss or medical disability can mean devastation for many American families," said Dave Jones, president, Association of Independent Consumer Credit Counseling Agencies. "Savings can help save families from bankruptcy, home foreclosure and/or a ruined credit history."
To help consumers begin to save, AICCCA offers the following tips:
Pay yourself first. Waiting to fund savings until everything else is paid will not work. Determine an amount you can afford and put that money aside first, every time, before you pay any bills or other expenses.
Create an emergency savings cushion. First priority for savings is to accumulate three to six months of living expenses in an accessible account. This fund will help you to avoid going into debt to pay for unexpected expenses or make up for a loss of income. Ultimately your savings cushion could save you from bankruptcy or home foreclosure.
Develop savings goals. Use short and long term savings goals to help motivate you to save. Short-term goals might include saving for a new piece of furniture or a weekend getaway. Long-term goals might include college tuition or a vacation home.
Make savings a priority. Commit to saving a portion of all future income increases including raises in pay and bonuses. Your ultimate goal for savings is to save 10 percent of your income each year.
Founded in 1993, Association of Independent Consumer Credit Counseling Agencies (AICCCA) is a national membership organization, established to promote quality and consistent delivery of credit counseling services. AICCCA and its members are focused on improved creditor relations, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, counsel millions of consumers annually nationwide and provide debt management services to consumers with excessive unsecured debt. For more information or to contact an AICCCA member office call (800) 450-1794 or visit www.aiccca.org.
