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Debt Reduction & Stashing Savings Supposedly “Not Enough”

After reading a recent Time article by Martha C. White, we here at FinanceSpectrum.com are left feeling a little indignant. White’s article, titled “Why Saving Money and Cutting Debt Doesn’t Cut it Anymore,” describes why these two tried-and-true methods of becoming financially fit won’t stand up to the “economic current” that is pushing strongly in the other direction.


We’re sorry, but if chipping away at debt and building nest eggs and emergency funds doesn’t cut it, then we don’t know what does. And apparently neither does White. She points out that student loans are sky-high these days, replacing consumer debt, and that interest rates on savings accounts are low, and that having 3 months’ emergency fund money saved up is not as good as 6 months. But nowhere in her article does White actually offer some advice as to what will work for consumers to perfect their money management skills and maximize their funds.


The thing about student loan debt is that it is becoming an overwhelming problem, and we at FinanceSpectrum.com do believe that some massive changes need to happen to the state of student loans in the U.S. (The fact that the rates for new Stafford loans just doubled at the beginning of July doesn’t help, either.) But until then, people need to be more realistic in the amount that they borrow. Aside from that American consumers are doing a phenomenal job of tamping down the debt and setting aside some savings—and the numbers prove it.


So Americans, don’t bemoan the state of your finances and shake your heads sadly wondering what else you can do. Reduce your debt, and save for rainy days. Those are the keys. A tool to help you achieve both these things is a monthly budget, something we highly recommend families and individuals implement to help keep everything on track. But the formula is simple: if you have more coming in than you do going out, and you’re saving money each month and chipping away at your debts, then you’re on the right track.