How are your savings looking? Prospera Credit Union CEO Ken Eiden, Jr. says consumers ought to be doing themselves a favor — by paying themselves first. Eiden says an appropriate household savings should cover not less than six to twelve months of monthly expenses, although he concedes that's tougher to do with the economy in disarray. "It's sort of like asking the folks to close the door of the barn when the cows are out," says Eiden. "But. the reality is, it's never too late to start a solid savings program."
Is the importance of saving getting much attention on the campaign trail? Eiden says he's not hearing it. "I do not see public policy really moving in the direction of encouraging people to save. I think public policy is almost the exact opposite of that." Eiden says government policy is aimed towards "cheap oil and plentiful credit," but he believes the economy would have fewer booms and busts if more of us were saving prudently.
In June, Eiden signed on to a report from the Institute for American Values and other think tanks, entitled For a New Thrist: Confronting the Debt Culture. He says the global economic crisis which has erupted since then reinforces the importance of saving, for American households.