Bankruptcy

The Challenge to Get Americans to Save

By Chris Kramer

Many Americans find themselves filing for bankruptcy when an unexpected expense (like an illness, death in the family, divorce or layoff) leaves them in the lurch. Unfortunately, what that means is that too many people don?t realize until too late how important it is to have a financial safety net.

A savings cushion can make the difference between managing during a crisis and being overwhelmed?that?s why building a savings fund is an important part of any bankruptcy recovery.

Think, Save, Win

A recent story from the New York Times tells about how asset manager TIAA-CREF, founded by philanthropist Andrew Carnegie, has decided to challenge the country to start saving more.

Here?s the deal:

• Think of ways to save: TIAA-CREF has initiated a contest that challenges Americans to think of a way to increase our country?s savings rate (which, in the recent past, dipped to below zero, meaning we were spending more than we were making) to ten percent of income in two years.
• Get creative: As the Times article points out, the savings plan can be anything ? a government program, an online tool, a business, a game, and so on. As the contest?s guidelines state, the idea must be original, workable and inspire U.S. citizens to begin saving more in the next two years.
• Get paid: The prize offered for the winning idea is $50,000?no small sum for most of us. Plus, several runners-up will receive cash prizes as well.

Saving some of the money you make is one of the most effective ways to prepare yourself for a crisis, whether economic or otherwise. Even getting minor car repairs can be a huge financial stressor if you don?t have adequate funds set aside.

This potentially lucrative contest requires that ideas follow these guidelines:

• Creativity: The winning idea will, according to contest rules, be original. That could mean using tools in a new way or developing entirely new tools to get people to start saving.
• Feasibility: In order for an idea to win, it must be realistically possible?in other words, the various social structures we have in place must be able to execute the plan.
• Effectiveness: Needless to say, an idea won?t win if it doesn?t actually work. The winning concept will function in the real world.
• Clarity: Remember that you need to communicate your idea to strangers who will be judging you, so be as direct and concise as possible.

When you?ve come up with your winning idea, enter at TIAA-CREF's Facebook page.

Additional Resources

The Decline in the U.S. Personal Savings Rate (PDF)

Full post as published by The Bankruptcy Blog on June 05, 2010 (boomark / email).