What will it take to make Americans save more?” wonders Michelle Singletary in her latest column at The Washington Post. Singletary points to a recent survey that reveals Americans know they’re not saving but they just don’t care enough to change. (I recommend reading Singletary’s article via the Seattle Post-Intelligencer, where there are fewer ads and no pagination problems.)

What’s the root of the problem?

  • Our homes are more expensive.
  • We’re consuming high-tech gadgets like high-def television and high-speed internet.
  • The costs of core components of our lifestyle — like health care and education — are increasing faster than inflation.
  • We’re more willing to take on debt.

The floundering economy isn’t helping. “Slightly more than half of middle-class respondents said they’ve had to reduce their spending in the past year,” Singletary writes, “and they expect to have to continue these cutbacks in the year ahead.”

Why? Because nearly everyone (including the people I talk to in real-life) believes that we are entering — or have already entered — a recession. Americans my age (and younger) have never lived through a prolonged economic downturn. We don’t know what it’s like. We don’t understand the skills required to weather the storm. (Yes, I know the economy struggled earlier in the decade, but not like this.)

While the government may be slow to acknowledge the recession, the average person is already feeling it. Though the politicians may be turning a blind eye during this election year, Warren Buffett knows:

Asked by Germany’s “Der Spiegel” weekly whether he thinks the U.S. could still avoid a recession, he said that as far as the average person is concerned, it’s already here. “I believe that we are already in a recession,” Buffett was quoted by “Spiegel” as saying. “Perhaps not in the sense as defined by economists. … But people are already feeling the effects of a recession.”

Among the friends I talk to, this is certainly true. It’s even true at the box factory. Though I no longer work there, I keep in touch. Business has been slow. Very slow — not just for us, but all over the city. We’ve always said that boxes are a sort of “leading economic indicator”. When orders are down, I worry about what this means for the economy as a whole.

I also fear that the lack of savings among average Americans could cause real problems if the recession is lengthy or severe. If we, as a country, have no savings and are deep in debt, how are we going to manage?

Personally, I’m not feeling the pinch yet. Because I’m now working from home, gas prices aren’t affecting me. Food prices are shocking, but we’ve been eating out less, and soon our garden will be providing fresh produce. Meanwhile, I’ve begun to protect myself with an emergency fund and retirement savings. The future doesn’t frighten me as much as it might have in the past.

What about you? Are you feeling the effects of a recession? What changes have you made to cope with the current economy? Are you saving more now than you were five years ago? Or are you one of those who hasn’t found the will to change? Do you worry that you’ll have to dip into your emergency fund or retirement savings to make ends meet? If you’re not in the United States, what’s life like in your country? I’m curious how others are coping, and whether or not it makes a difference how much money you’ve saved.

In her article, Michelle Singletary writes, “I am not — like many people — bemoaning the economic downturn. I think that in one respect it’s a good thing. It’s what this consumer-driven, debt-laden country needed.” Sounds like a little bit of tough love. But you know what? She may be right.

Thanks to Tim and Kristina for forwarding these articles.