Spending vs. Saving
Cash management is something many, many individuals struggle with on a daily basis. Do you know where your money goes? I dare you to keep a daily journal of your cash (and credit) spending over a week. How about a month? If you don’t know where your money goes then how can you accumulate the wealth to attain those goals from Week One?
I’ve heard news accounts stating that the majority of Americans are living paycheck-to-paycheck; I prefer to believe in sound studies, for example one completed by the Harris Poll in 2016 stating that it’s 38% (http://www.cbsnews.com/news/who-lives-paycheck-to-paycheck-you-might-be-surprised/). A more recent article from December 2020 shows 1 in 3 adults are having troubles paying expenses https://www.npr.org/2020/12/16/941292021/paycheck-to-paycheck-nation-how-life-in-america-adds-up.
In general Americans spend more than they save. Your textbook author has stressed the importance of creating a spending (budget) and savings plan. Although there are numerous compelling and undeniable reasons for savings many still find it difficult to begin. Just as many individuals, if not more, could not even tell you how their money is spent.
Why do you think individuals have problems starting to save? How can someone lose track of where they spend their money? Are there standard excuses? If so, how do we overcome these excuses? Why is saving, regardless of the amount, beneficial and strongly encouraged?
