A point well taken, and deserves repeating. Whoever is blessed enough to have a job in this current economy is a fool if they aren't socking away every extra dollar they make.
I have a steady job, and my wife and I are putting away a 9-12 month supply of cash in a separate savings account (this ENTIRELY apart from the 401k, IRA, etc). We are nearly 2/3 of the way there. Until we have that in place, we are not buying ANYTHING we don't need. No dining out except special occasions, and no movies or magazine subscriptions. We get videos from the library and live on the cheap. I've forgone buying a new TV to replace our 12-year old model, and we are buying our clothes from TJ Max and Ross Dress for Less. In today's economy, you are a fool not to save.
Actually, this is the WORST thing for everyone to do. It guarantees a downward spiral (the "Paradox of Thrift"). Right now people should be digging into savings and taking on debt to buy things in anticipation of better times ahead.
Unfortunately, during the go-go, cocaine powered Clinton years, NO ONE saved like they should have. During the years of above average economic growth, debt of all kinds went up. Everyone gambled their money in the stock market. It was ridiculous. My wife's decorator was daytrading, for crying out loud!?! One time, she mentioned a highflying tech stock she bought and I decided to see how much research she'd done. PE? Didn't know. Competitors? Didn't know. Market share? Didn't know. Apparently, the stock chart showed a "cup and handle" pattern which gave a buy signal. Of course, she's blown all her gains and lost most of her principal since the bubble burst.
That's a good thing ... I was out for 8 months ... luckily I had about 8 months worth of savings and JUST made it thru. The stock market crash completely wiped out the 401K BUT I still have my house equity. BUT if I get laid off again before I can resave that 8 months safety money, which doesn't happen over night ... I'll be picking out that sweet spot the live in ... under the bridge. In 25 years of engineering .... I have NEVER seen it anywhere near as bad as now. That means since the late 70's thru the 80's and the 90's. I took a job that is only distantly related to my disipline and took a 25% pay cut to boot. Luckily the kids are gone and the cars are paid for ... the're getting old though (200,000 miles on one) but the payment is right. I would hate to think about how it would be if I still had a couple of kids at home and a car payment. Problem is that the retirement money is now gone and companies DO NOT HIRE people over 50 (except MAYBE McDonalds). I have to face the fact that I am in my last good paying job and make to best of it.
Yup! My savings are saving me right now...