Mar 3, 2009 4:41 am US/Pacific
Despite Recession, Americans Still Saving
DENVER (CBS) ―
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Kate Scott talks with the Hostetlers.
CBS
The uncertainty of the stock market is prompting many people to pull their money out and start saving.
In 6 months, the the personal savings rate has jumped from less than 1 percent to about 5 percent, CBS station KCNC-TV reported.
Kate Scott, Certified Financial Planner with Cherry Hills Investment Advisors, said there are a few strategies to consider when attempting to stay afloat.
"I think it's a better approach to save for things that you need and also have a cushion for emergencies. Right now if something comes up we throw it on a credit card."
Scott also offered this advice:
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Consider when you need the cash; ladder the maturities of the CDs (3 months, 6 months, 1 year) based on your needs. Have at least 6 months of expenses available in readily accessible savings or CDs.
- If you don't need the money for a while but want to stay out of stocks, consider Treasury Inflation Protected Securities (TIPs) or I-Series savings bonds. Inflation is low now but it won't stay that way.
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Rather than buying individual TIPs you can buy an exchange-traded fund (ETF) such as iShares Barclay's TIPs (symbol TIP) or a mutual fund that owns the bonds (like Vanguard's Inflation Protected Bonds, symbol VIPSX)
For more information on these investments, go to:
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Timeline: U.S. Credit Crunch & Financial Failures
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