Why does the average U.S. citizen not save money, but instead spend more money each year than they make?

The U.S. savings rate today is a negative number There are almost as many cars in America as people. So survival is a poor answer. You don't need a car to live. If everyone spent there money and saved nothing there wouldn't be any new business. (New business comes from invested savings) The economy can not grow without new business. Wouldn't keeping up with the Jones and valueing yourself based on matierial goods make the average American want to strive for success. Creating a high standard of living would at the same time create a desire to make sure to maintain such in case of a rainy day. If a person eats hamburger or kobe beef, wouldn't they want to keep eating it even during bad times? Maybe the U.S follows the lead of their government who goes higher and higher into debt each year.

Public Comments

1. Because American's are idiots. At least average ones...
2. thats easy. its called SURVIVAL!!! quite often we are barely making enough to get by.
3. Cause we are taught spending helps the economy and is the american thing to do, plus we all compete with each other to have what everyone else has... its called keeping up with the Joneses
4. I'm a Canadian, so I'm going to refer to North Americans (excluding Mexico) in general. North Americans have enjoyed the highest quality of life in human history for the past 50 years. Even events like September 11 and Hurricane Katrina have not woken people up to this fact. North Americans believe they have a birthright to be overpaid, have their retirement and healthcare taken care of, and never have to save or plan for the future. Things are changing. Walmart, General Motors, Ford. In the new Global Information Economy it doesn't matter where you live. You must be in control of your financial future, because no one else is going to do it for you. Young people need to realize how lucky they are. Every single person has the right to open a business, own stock in profitable companies and think and speak how they feel without fear. The poorest North American has 1000 times more opportunity than the richest Central African. It is up to North Americans to harness this power and stop blaming each other for their problems.
5. It's about living the famous "American Dream". To put it in simple terms, most Americans feel that must get all the material possessions that they desire because they see their neighbors with great possessions as well as celebrities on tv. So in order to define their own self-worth, most Americans spend exceedingly to create a false perception that they live a fabulous life. It's purely selfish and stupid to live above your means.
6. I have to think its about more than survival. America is one of the only countries in the world where the "poor" have cars, microwaves, televisions and an ISP in their homes. I think it's because we are not properly educated about money and too many of us have an entitlement mentality that says "the state will take care of that".
7. Admittedly this is an oversimplification but it's beacause that's what the big corporations want. While the government has tools at its disposal to affect this, the government, particularly the Bush Administration, is a puppet of corporate america
8. Americans don't want to save to have it later. They want it NOW! Buy now, pay later! If you don't have this product, you will DIE!!!!! I bought into it as a young man, no pun intended. I'm still paying for my craving for instant gratification years later.
9. This is a great question and alot of good answers. two core points have already been made: we are a nation of gratification junkies and we have had no semblance of a financial education. These two things perpetuate each other. It will be a long, painful change but we must reeducate America, starting with children. Financial education must become an integral part of public school curricula.