What percentage of household income do you think should be saved? Also, what political policies could be put in place to increase national savings and lower the debt?

This post is the first of hopefully many questions and answers. Feel free to post questions on the Facebook page, send us private messages, emails, or post on the MoneyTalk forum. Most likely, numerous other people have similar questions or thoughts. We will gladly answer any questions privately. Then, if we feel that the question will benefit everyone, we will post it anonymously on the page along with our response.  

The following is the first question posted on the MoneyTalk Forum. Robert Cook gave the following response:

Question:
What percentage of household income do you think should be saved? Also, what political policies could be put in place to increase national savings and lower the debt?

Answer:
Regarding what percentage of household income should be saved, that depends on each individual situation and circumstances, as all things relevant should be considered. Age, income, family obligations, debt and so forth are a few of the salient factors.

If the person is young and not in debt, then as much as possible should be saved at an early age, as it's a great habit to acquire early in life.

If possible, ~10% of gross income seems about right to me, although there should be no hard and fast rules.

And if the person is working where employer matching funds are available, at the very minimum he should save enough to get the maximum match. That amounts to fifty cent pre-tax dollars in cost to him for each dollar saved and invested.

In any event, each time the individual's income increases, he should establish the habit of saving a substantial part of that increase. He won't miss having the income since it's all 'new found money' to him at that time.

Regarding the national debt and increasing national savings, we should first follow the golden rule of hole digging and stop making the hole deeper.

If that were to happen, over time the debt would become more manageable as future income gains would reduce the percentage of debt to the total.

And we should teach ourselves that there is no free lunch, despite what the vote seeking politicians may say.

And that the private sector is the only real productive sector, and not the public sector that is ruled by our self serving 'public servants.'

Productivity (more output for the same input or the same output for less input) is and always has been the single biggest factor that makes us a wealthy nation. Period.