Obama Savings Plan – Will The Personal Savings Rates Continue To Rise??

The Obama saving plan has the potential to help many people.  In his weekly internet radio address, President Obama talked of the almost non existence of savings in America and the continual growth of borrowing.  With the credit card debt rising and so many families losing their houses toforeclosure or filing for bankruptcy, it is essential people start focusing on their finances.

Recently, there has been some growth in personal savings rates.  From basically zero last year to a recorded 4.2% by mid-July, there is defiantly an increasing number of financially responsible people out there.  Where this is good news, it does not speak well for the 95.8% out there who need to put money away.  That is why the administration has taken these steps to help people save.

The areas affected by President Obama’s savings plan includes how to convert sick days, tax refunds, and retirement plans.  People will have the option to convert unused sick or vacation days into 401(k) contributions.  It will be easier for those who are owed tax refunds to U.S. savings bonds.  And, those employed in a small to medium sized  business will automatically be enrolled into a retirement plan, though they can opt out if they so choose.

The Treasury Department has started to work on rules governing such things.  Because of this we will see an almost immediate change.  This new plan has the potential to leave you on the receiving end of the savings fairly quickly.  This doesn’t mean everything will be great instantly.  A few senior administration officials said they are not sure how much it will help national savings rates but they are focusing on those who are not saving enough.

It will be interesting to see how this plays out.  The potential to help so many people all at once rarely is as good as it seems.  It is possible, though, that the measures being taken could help families save and America start to stand on its own feet again.  There will still be people borrowing too much and people falling into debt, but hopefully that number will start to decline.