Americans Need to Save More

W A S H I N G T O N, Feb. 20 -- More than half of American families live frompaycheck to paycheck and many have seen their assets erode despitea decade-long economic expansion, the Consumer Federation ofAmerica said as it mounted a campaign to get people to forma financial plan and save.

The campaign, called "America Saves," is targeted at peoplewith low and moderate incomes. It will begin in Cleveland nextmonth and in Kansas City, Mo., in April, and the organizers plan toeventually expand it nationwide.

The consumer group released an analysis of Federal Reserve data Tuesday showing that the "typical" U.S. household has net financialassets, including retirement savings, of less than $10,000 and thatmany families lost wealth in the late 1990s as consumer debtincreased.

The median for all U.S. households was $9,850 in net financialassets, or assets minus debts, in 1998, the most recent yearcovered by the Fed data. Financial assets include savings andinvestments but exclude a primary home and vehicles.

Among low- and moderate-income households, the median was lessthan $1,000.

Families Focused on Survival

In a new survey of consumers, commissioned by the ConsumerFederation, 53 percent of respondents said they live from paycheckto paycheck sometimes, most of the time or always. The percentagerose to 64 percent for households with moderate incomes of $20,000to $50,000 a year and to 79 percent for those with low incomes ofless than $20,000.

Sixty percent of those surveyed said the phrase "I don't thinkI'm saving enough for the future" describes them somewhat or verywell.

The survey, conducted by Princeton Survey Research Associates,polled a national sample of 1,637 people who make the financialdecisions in their households in September and October. The marginof error was plus or minus 3 percentage points.

Stephen Brobeck, executive director of Consumer Federation,described many families as "strapped and struggling" and"focused on daily survival."