SmartyPig

For the third straight month, Americans saved more money than they had the month before, taking the personal savings rate to 6.4% – its highest rate in more than one year. Smart consumers saved post-tax income of $726 billion in June. The savings rate is now about three times the 2.1 percent average for all of 2007, before the recession began.

And while consumer spending and income remain cloudy and gray, it’s difficult not to be encouraged. People saving more and buying things with cash instead of credit would have saved us from the disastrous economic tsunami many believe we still remain in the midst of. From an AP report: “Higher savings restrain spending in the near term. But the extra money helps households get control of their bills and make purchases they can afford.” Said Paul Dales, U.S. economist at Capital Economics. “It is of some comfort that households now appear to have something of a cushion that can be used to pay down debt or support spending.”

At SmartyPig, we could not agree more. There are not only things you need but things you want, as well. Using cash to make those purchases instead of high-interest credit cards will keep you on the outside of the tsunami looking in – or least under an umbrella that pays you 2.15% APY* on your goals and cash bonuses of up to 12% when you are ready to use those dollars. Double digit yields in this downturn? That’s a forecast worth paying attention to.

Thanks,

Mike Ferrari, SmartyPig co-founder
@mferrari

*Balances $0.00 – $50,000.00 earn 2.133% (2.15% APY). Balances above $50,000.00 earn 0.499% (0.50% APY). Rates may change at any time without prior notice.