Welcome to Big Box or Make Saving Money a Way of Life

Americans have forgotten how to save money. Our national savings rate is next to zero as we continue to spend our money on everything from McMansions appointed with fancy appliances and oversized furniture, gas guzzling vehicles occupied mostly by one person, wide screen high-tech TVs that require a football-stadium size room, tiny-screen cell phones that show clips of the same shows that we just watched on our big TVs, ride on mowers that use gas, make noise and deprive us of any useful exercise, GPS systems that tell us to make a left turn just before the left turn sign appears on the highway and many more gadgets, trinkets and other cleverly marketed junk.

Steady income growth and easy money at low interest rates have made all of this spending possible. But what about the future when we want to stop working or can not work because of age and infirmities? What then? Because most Americans have forgotten how to save money, many will find that their golden years are not so golden. Getting a paycheck at seventy by greeting customers at the local big-box store where you bought lots of your stuff won't be much fun.

The arithmetic of saving money is simple. One dollar invested every month for 30 years at a six percent return yields $1,909. One hundred dollars invested each month would give you $190,900.

So the choice is yours. Make savings a way of life and accumulate a sizeable nest egg so you can wile away your senior years. Or save little and end up saying "Welcome to Big Box - let me tell you about our specials."

Posted May 6, 2006.