Andy Rooney_ 60 Years of Wisdom and Wit - Andy Rooney [60]
Savings 127 Savings
How much of your income do you spend and how much do you save for later?
Some of those people who are always announcing things in Washington announced that Americans saved less of what they made last year than they have in all history. The savings figure the Commerce Department gave was 1.9 percent of income after taxes. That means people saved just $19 out of every $1,000.
The experts have a lot of theories, naturally, on why people aren’t saving. They say, for instance, that car prices were low and good deals on loans were available so people bought cars instead of saving.
To use a word that was popular among my classmates in high school, “Baloney!” People aren’t saving money because when they do, they get taken and end up having less than they started with. The trouble is, there is no longer a good way to save money. It used to be that people put it under their mattresses, in the sugar bowl or in savings banks, but none of these makes any sense now. Neither the mattress nor the sugar bowl pays interest and the banks don’t pay much more. Not only that, people have learned that by the time they want to use the dollars they’ve saved, their money is going to be worth less than when they stashed it away.
Banks are smarter about money than people are. People have learned that and they’re bank-shy. Even though people aren’t saving much money, savings banks and other savings businesses are going to make $5 billion in profit this year. That’s because of all that mortgage money they loaned out a few years ago at figures like 14 percent. The savings banks are paying something like 5 percent in interest to the people with savings accounts whose money the banks are loaning out now.
A lot of us have had to relearn what our fathers, mothers and Ben Franklin taught us about thrift. We all grew up on phrases like “A penny saved is a penny earned,” “Waste not, want not” and “Prepare today for the wants of tomorrow.” Savings these days, we’ve discovered, are better for the bank than they are for us.
When I made money delivering newspapers, my mother got me to open a savings account. Every once in a while I’d put an amount like $1.70 in the bank, and at Christmas I’d add the twenty-five dollars Uncle Bill gave me. My mother said I’d need it to help pay for my college education. Over a period of years I saved $189. The bank gave me $6.25 in interest. The trouble was, by the time I got ready to go to college, tuition, room and board were $2,000 and I realized I might as well have spent my newspaper money on the expensive Duncan yo-yo and the pogo stick I always wanted.
That’s what people are doing now. They aren’t saving money, they’re buying yo-yos with it because they know it’s too hard to save.
How do you save? There are thousands of savings institutions keeping a total of $826 billion of Americans’ money, but you can bet not many of the executives of those banks keep their money in a low-interest savings account.
I liked the idea of a savings bank. I liked it when I put that $1.70 away with some confidence that I was doing the right and the smart thing. Fortunately for savings banks, they still have $826 billion of our dollars that they can loan out at 10 percent and pay interest on at 5 percent. This is dumb money the banks have, and they have it because it’s relatively safe and because a lot of people put it there from habit or because they don’t know what else to do.
Many young people today who never had a newspaper route or a piggy bank just say the hell with it. They admit they don’t know how they should handle their money so they spend it.
Our whole economy is based on spending and borrowing. You just know in your bones that it’s wrong. Someone has to figure a way for us to go back to the honest pleasure of saving