Savings Day – Are You Hoarding Cash?
Are you stockpiling cash?
Last month, a report revealed that Americans have saved an excess of $1.6 trillion during the pandemic. Driven by fears of an economic crisis, it started when three rounds of stimulus checks were issued by the government. People are saving far more than the usual three to six months that financial advisors typically recommend. In addition, people are also more conscious of their spending. Rising incomes and a healthy labor market have resulted in the highest personal savings rate since World War II.
Economists say hoarding savings can hurt long-term. Cash simply does not hold its value during inflationary times. However, it grants flexibility and is beneficial for emergency situations. The inflation rate in January of last year was just 1.4%. By October it was over 6%. That’s the highest level in over 30 years. Risk aversion is sweeping global markets. Some predict that we’ll enter a time of hyper-inflation. Yet, historical data shows that deflation is the bigger threat. As God’s people, Remember His Word: “Some trust in chariots and some in horses, and some in their savings accounts, but we trust in the name of the Lord our God.” (Psalm 20:7)
Rising prices can lead to credit card debt. If you are struggling to make payments, I recommend Christian Credit Counselors. They’ll create a debt management plan just for you. For more information call the Crown Helpline: 800-722-1976 or visit us online at crown.org/ccc.