Out of Control Spending and The Refrigerator Method

Summary: Almost 50% of Americans cannot come up with <a href="https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/">$400</a> if they needed it urgently. 1 in 3 Americans has $0 saved for retirement. In the U.S. it seems we’re much better at spending money then we are saving. This spending problem is leaving too many American households living paycheck to paycheck with close to nothing saved for the future.<br> Americans have a serious problem saving money<br> The savings rate has been falling for most of the past few decades. Maybe we stopped saving when our income growth flatlined after the recession, maybe it’s because we’re being buried in student loan debt, or maybe consumerism has taken over but it doesn’t change the cold hard truth that most people are not prepared for retirement at all.<br>  <br> <br> <br> Americans today save a lot less than their parents and grandparents did a generation ago. The average savings rate for our parents was between 7 and 10 percent and two generations ago, Americans saved 10 to 13 percent of their income.<br> Today the average is 4.8%. Whomp Whomp. So where is it all going?<br> <br>  <br> <a href="https://howmuch.net/articles/how-americans-spend-money-2017"></a><br> Chances are, you’re not saving enough<br> Did you know 1 in 3 Americans has $0 saved for retirement? Yeah, that’s a scary number.<br> And 56% of Americans have less than $10,000 saved for retirement and 74% have less than $100k saved for retirement. 100k may sound like a lot of money now but it’s nowhere near enough to retire.<br> <a href="http://time.com/money/4258451/retirement-savings-survey/"></a><br> If you’re young you still have plenty of time to save for retirement but, you’ll need to figure out how much you will actually need. You can’t just pull a number out of your butt.<br> And if you are already consistently saving for your future, how do you if you’re saving enough?<br> A good benchmark to follow is aiming to replace between 70% to 90% of your annual pre-retirement income through savings and Social Security.<br> For example, if you earn an average of $100,000 per year before retirement should expect to need $70,000 to $90,000 per year in retirement.<br> Want to know how much you need?  Betterment has an <a href="https://www.listenmoneymatters.com/go/betterment-retirement-calculator/">awesome retirement calculator</a> that will tell you how much you’ll need in retirement, and what you need to do to get there.<br> Go ahead, give it a whirl.<br> <a href="https://www.listenmoneymatters.com/go/betterment-retirement-calculator/"></a><br> <br> Saving now is easier than saving later<br> It’s much easier to save money while you are young – you know, before the mortgage, 2.5 kids, and minivan payment. You are also more likely to get consistent raises or big bumps in your salary in the begining of your career.<br> Instead of <a href="https://www.listenmoneymatters.com/lifestyle-creep/">upping your lifestyle</a> every time you get a raise or bonus be smarter with the extra money.<br> Actually don’t even think of it as “extra money”. Pretend it’s not there.<br> That means holding out on getting your own place and living with your roommate a little longer.<br> That means going your local dive bar with the great happy hour instead of the upscale cocktail lounges. Let us be honest – you’re going to drink the $16 cocktail the just as fast $6 beer.<br> That means packing your lunch instead of getting a $15 salad every day.<br> That means driving a beater car for a few more years instead of buying that Tesla. Your retired self will thank you.<br> <br> Or better yet, move closer to work so you can commute to bike in. If you live in a city, don’t get a car unless you really need one. We use <a href="https://www.listenmoneymatters."></a>