In a recent article here at DQYDJ I posted a chart which graphed worldwide interest in ‘Frugality’ and ‘Personal Finance’ based upon the amount of interest registered by Google. There’s actually another interesting takeaway from that picture – interest in the term ‘Personal Finance’ is losing steam in the United States. Interest understandably grew during the recession, and it spikes in the beginning of every year, but interest is definitely trending downward. It opens up an important discussion: Are Americans losing interest in personal finance?
Savings Rates and the Recession
The recent Great Recession lowered a lot of good things – median incomes, employment levels, and confidence, among them. However, one thing that it did raise was the savings rate which had been on the decline for a long time. To wit: in May 2009 the rate peaked at 7.1%. It’s previous bottom was 1.0% in April 2005. That’s a pretty massive boost, 7.1 times obviously, but a savings rate of only 1% across the entire country? Pretty low. So low, in fact, that it’s the lowest the rate has been since the data has been collected.
Now that 7.1% has drifted back towards that 1.0% level, as households are only saving 4.5% as of August.
A Double Dip Recession, Yet Lack of Interest in Personal Finance?
Did Americans stop caring? Are we fully prepared for retirement? What’s behind the savings rate drop? While predictions of a double dip recession grow louder, the savings rate has actually fallen from 5.3% in June (all these numbers are seasonally adjusted).
Google Insights for ‘Personal Finance’
Whatever the cause of the waning interest in personal finance, it’s alarming. So soon after the last recession with a decent chance of a double dip recession seems like the sort of conditions that would cause people to watch their cash closely, if not horde it. Consider this: through the entire decade of the 60s the savings rate stayed above 6.5%. Have we lost interest in personal finance?