After many years of declines in our household savings rate, the recession seems to have sparked a savings revival. The rate even hit a high of 6.4 percent of disposable income in May, the highest since 1993. It was 4.4 percent in the most recently reported month of October, whereas it had been hovering around zero percent for several years preceding the recession. According to a New York Times article, there are many factors that have likely contributed to the higher savings rate such as tightening credit standards and a trend toward automatically enrolling employees in retirement plans. However, the article concluded that the main factor is very likely people’s fear of unemployment.
Have your savings habits changed over the past year? If so, what has been your primary motivator?