- The Washington Times - Monday, June 20, 2011

Americans have learned little from the Great Recession about saving for rainy days.

These days, many workers are still recovering from the latest financial collapse, and they can barely afford to pay their bills, let alone save. Only 24 percent of Americans have the six-month emergency cushion they should have, according to a Bankrate.com study. The results match those from a 2007 pre-recession study, demonstrating Americans aren’t changing their habits.

What’s worse: 24 percent have no savings at all, and 22 percent have fewer than three months savings.

But with 6.2 million Americans having been unemployed for six months or more, and many taking “underemployment” jobs just to get back on their feet, financial advisers say it is vital to have a cushion that large.

“The majority of Americans still have much work to do in building an adequate emergency savings cushion,” said Greg McBride, senior financial analyst for Bankrate.com. “The solution is to pay yourself first. If, instead, you try to do your savings with what’s left over at the end of the month, too often you’ll find that nothing is left over.”

Many Americans — 46 percent — do have enough money saved for three or more months. That’s a good start, Mr. McBride said, but it’s not enough.

The problem is “Americans are known for being consumers, not for being savers,” he said. “I’ve had people look me in the eye as they hold a $4 cup of coffee and tell me they never have any money to save.”

“At some point, you’ve got to worry about your own personal economy,” he said.

Mr. McBride suggests that workers start small by saving whatever they can afford, and then work up to saving 10 to 15 percent of their paycheck until they reach the six-month cushion.

For people who own their businesses, or single-income households where there is a “sole bread winner,” they should focus on saving enough money for nine months to a year’s worth of expenses.

“It sounds intimidating and insurmountable” at first, Mr. McBride acknowledged, but “even if it’s just 20 bucks,” it can make a difference.

“Those are destinations, not starting points,” he said. “It’s going to take a while to get there.”