By: KAREN BLUMENTHAL
Posted By: Robert Katz
Pat yourself on the back.
Government data show that in the face of the financial crisis, we have reduced our debt, cut our spending and, by one measure, boosted personal savings to the highest level this decade.
So now that you're back on track, how are you going to make the most of your hard-won reserves? Will you rebuild your retirement accounts? The kids' college funds? Buy a new home? Or should you put it away for a generic rainy day—or the day the rain comes through that old roof?
No matter how hard you try, there never seems to be enough savings to cover everything, even if you put away the 10% to 20% of your income that many financial advisers recommend. And let's face it, many of us don't save anywhere near that.
David Laibson, a Harvard University economist, estimates that about 10% of Americans save too much, while perhaps 30% of us have a healthy savings habit. And the rest of us? "When there's money in the bank account, people go out and spend it," he says.
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