@Half of Americans Have Less Than $500 in Savings

The US last printed a $500 in the 1930s. We can imagine why they fell out of favor in that era. But it's probably just as well they did, because based on recent research, the market for them is probably still not too robust.

Unemployment, compensation cuts and the rising cost of commodities have depleted Americans' savings to the point where almost half have fewer than $500 saved. Now, the study refers to Americans rather than American families, so one might well infer that the state of the average family is slightly better than that. Before drawing a huge sigh of relief, however, associated research reports that one third of American families have less than $1,000.

The implication is that Americans are living paycheck to paycheck. Which is dicey in an era when paycheck values have been declining in absolute and relative terms. With the economy reportedly beginning to show signs of recovery, however elusive, these figures may change slightly. But in a consumer-driven economy in which real estate prices have still not rebounded, denying families the wherewithal to borrow against those markedly depreciated assets. the implication for business is that price sensitivity will continue to dominate purchase decisions for the near to medium term. And profits, such as they are, may have to continue to come at the expense of employee compensation which, in turn, will limit upside potential - and so on.

It is worth noting that the American luminary whose face graced the $500 bill was President William McKinley. He was an Ohio Republican known for his embrace of crony capitalism. He was assasinated early in his term (by an unemployed anarchist)so his brief rise to prominence was perhaps not so coincidentally reflected in that of the bill that bore his likeness. JL

Harry Bradford reports in the Huffington Post:

Got five Benjamin Franklins stored under the mattress? You're doing pretty good then.

Nearly half of Americans don't have more than $500 saved up, according to a recent studyby CreditDonkey.com, a credit card comparison company. Of the roughly 1,100 Americans polled, 41 percent reported having less than half a grand of readily-accessible savings at hand.

With the country struggling to recover income lost during the recession, the study isn’t the first to make clear the desperate state of so many Americans' finances. Back in March, it was estimated that less than a third of American workers had savings of $1,000 or less, according to a study by the Employee Benefit Research Institute.

That lack of savings means most Americans have little in the way of a backup plan when things get tough. Indeed, over two thirds of Americans live paycheck to paycheck, a survey by the American Payroll Association found last month.

Perhaps that explains the retirement anxiety, which has begun to afflict some people still in their thirties. Many Americans have even more pressing concerns: 45 percent told CreditDonkey.com that they fear they’ll never be able to save much money at all.