Naughty: Negative Savings

The average American deserves a big lump of coal in their festive Christmas stockings this year. Their accounts are probably too depleted to buy holiday gifts, anyway.

The Commerce Department's Bureau of Economic Analysis knows whether you've been naughty or nice. It's telling Santa that you've been very naughty this year. Your personal savings rate has been negative all year long.

Now, you might have some excuses, and some of them might even be valid. Personal savings statistics reflect the difference between your personal spending and your disposable income. Savings can hover around zero or dip into negative territory if you're financing your spending through debt, like credit cards or home equity loans. Drawing on past savings or selling investments also counts against the personal savings rate.

If you're retired, Santa will look more kindly upon you this year. (It also helps to leave milk and chocolate-chip cookies. And if you really want to butter up St. Nick, throw in a couple of carrots for the reindeer.) Retired folks will undoubtedly be spending more than they save. They've spent a lifetime building up that cushion in order to say goodbye to their jobs forever.

What about the rest of us? Well, we've had reasons to feel flush. We had some big stock market gains in the late 1990s, and we may be reaping the benefits of this year's stock market rise. When the stock market started to slide, our houses suddenly became worth more than we'd ever dreamed. Tapping into those sources of wealth statistically causes the savings rate to dip, even if we feel perfectly comfortable drawing on that money for our extra spending.

Or, in any given year, we might finally reach a spending goal that we've been saving diligently to meet. Maybe it's a major home-improvement project, or college tuition for a child, or a much-deserved cruise around the world. Sometimes we plan for a negative savings rate.

However, the negative savings rate seems to have become a pandemic. Look at the other indications of savings stress. The Federal Reserve Board reports that our consumer debt is steadily on the rise. We add more to our credit card balances, and we struggle to amass enough money for retirement. We tell survey takers that we're worried about paying for our holiday spending when our credit card statements arrive in January.

So, do you deserve coal instead of presents this year? How do your personal savings statistics rate?

If you're carrying credit card balances -- or even worse, adding to them -- it's time to resolve to get onto Santa's nice list by attacking that debt. Persistent credit card debt won't help you build any of the wealth that will make your personal savings statistics soar. Look here for help.

Then look at your other debts, like home equity loans, vehicle loans, and must-have-that-new-plasma-television loans. Finally, ask yourself whether this spending simply fuels your consumer desires at the expense of your personal wealth-o-meter. If so, it's time to start building your wealth by laying off the spending.

Start with a hefty savings account to protect yourself from emergencies. You can find more information about that in the Savings Center. Then move on to your other goals. Santa will reward you next year.

For more Foolishness on Personal Finance matters, check out:

There's a whole world of naughty and nice out there!Take a lookat the rest of the bunch.

Saving money is an important part of achieving financial health and well- being. If you're looking for suggestions on ways to save more, or even how to get out of debt, a free 30-day trial toMotley Fool GreenLightcan help.

Fool contributor Mary Dalrymple welcomes your feedback.

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