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Too few Michigan residents are saving enough money

If there was one lesson that financial experts tried to impart on people during the recession and its aftermath, it's that it's smart to have an emergency savings fund that could help you weather a financial storm, such as job loss or a medical emergency. But a new study only shows modest improvement in that field, indicating that more trouble could lie ahead if the economy shrinks again.

According to a survey by the website Bankrate.com, 45 percent of Americans have more credit card debt than savings. That is only a slight improvement over the last two years. A senior financial analyst with Bankrate.com intimated that clearly the lessons of the recession aren't being paid attention to by enough people.

The risks of not having enough money in savings are many, with the main risk being that you'll need to file for bankruptcy if you have an explosion of debt and no means to pay it off. Of course filing for bankruptcy may be preferable in some cases, but it is not an easy process as it can affect your credit worthiness for years.

Figures from the U.S. Commerce Department also back up the alarming survey results. According to the federal agency, the personal savings rate was 6.5 percent in December. While that's an improvement over recent months, the amount of income that people are socking away has still been much too low during the last few decades.

Michigan residents should heed the warnings put forward in these figures. It's recommended that you have at least three months of salary in a savings account that could help you weather a short-term financial storm. Of course no one can properly prepare for prolonged unemployment or catastrophic illnesses, but it is never too early to start putting money aside.

Source: ABC News, "Nearly Half of Americans Have More Credit Card Debt Than Savings," Susanna Kim, Feb. 25, 2013

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