Released: December 01, 2008

Economy has more folks stashing their cash

Source: Sandra Block and Barbara Hagenbaugh, USA TODAY

The Great Depression created a generation of Americans that abhorred waste and considered debt the devil’s playground. Long after the economy recovered, they hoarded tin foil, saved little pieces of string and insisted on paying cash for their purchases.

Few economists believe this downturn will become another Great Depression. But the economic slump could have a lasting impact on Americans’ savings habits, particularly young people who may be witnessing the worst economy they’ve seen in their lifetimes.

The personal saving rate, which measures how much people save out of disposable income, was 1.3% in the July-September quarter. Although that’s low in comparison with other countries and a far cry from the double-digit percentages seen most recently in 1985, it’s more than twice last year’s rate.

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