There is a marked trend in the decline of personal savings of modern Americans. The all time low in money savings crisis has yet to manifest during our generation. Actually, the crash of personal savings is documented twice throughout modern history. In 1932-1933, during the Great Depression, the then generation of Americans had a significant problem saving money. Evidence of that is left in a paper trail showing a negative savings rate.

The savings crisis resulting from a negative savings rate becomes apparent once we properly define the term “negative savings.” Simply put, a negative savings means an individual spends every penny he has to his name, and then some more for good measure.

Now, in our modern generation, for the first time in nearly 75 years, the modern generation of Americans are having a budgeting and financial crisis. Earlier during this year, 2007, the United States Commerce Department revealed a startling figure showing savings rate had dipped to -0.5%. This figure meant that Americans as a whole have begun experiencing a financial savings and budget crisis. They are no longer able to support their own lifestyle, having to on average, spend slightly more than 100% of their total income.

There is significant monthly deviation in the figures released by the USCD, however, the figures speak loudly. There is a definitive crisis. With the impending crash of the American housing market, along with record breaking all time high in consumer credit card debt, along with other debt, Americans as a whole are experiencing a crisis in financial management.

The fact a savings crisis exists for modern Americans does not mean it is necessary. Many Americans carry a high latte-factor. That is, so to say, they rely on a daily indulgence of frivolous purchases, that if eliminated, would allow enough legroom to establish a positive savings record. Putting the latte-factor aside, even the utilization of smart and robust money managing strategies catering to the management of debt would tip the scale in favor of busting up the savings crisis inherent in the American budget.

The average American income now stands at $36,400 per year. 1%, a large enough figure to account for the current savings crisis, boils down to only $364 a year. Such a trivial cost could be offset by canceling premium channels on television, deferring on the purchase of big-ticket electronics, shopping the competitors offerings for credit cards and utilizing credit card consolidation, or even something as trivial as removing a soda. If an American drinks an average of three carbonated twenty ounce sodas a week, they will spend a cost of roughly $201.24 a year. Remove that coke from the modern American savings crisis, and you’ll find that Americans are only over-extending their budget by $162.76. Furthermore, remove 2 DVD rentals from blockbuster a month and you’ll find that the Average American’s budget crisis is reduced to $42.76.

The trick for an average American to avoid the savings crisis ultimately relies on reducing frivolous purchases, thereby reducing the overall latte-factor. If the consumer owes as much as the typical post college graduate in credit card debt, or owes a lot in mortgage, refinancing and consolidation could provide the extra nudge required to move their wallet from the red into the black.

One very important suggestion in eliminating the American saving crisis is to record a log of every purchase made over a typical two week span. By recording and reviewing the purchases made, an individual can make the very minor tweaks necessary for escaping a potential crisis with money. Ultimately, the secret to transcending the generation of modern Americans who can not manage their own money is a level head, and understanding of what is being spent out of pocket, and a willingness to cut back. By changing as little as a few trivial spending habits, every American could escape and eliminate the modern crisis in American budgeting. Left unchecked, this dilemma will surely grow worse and spiral beyond such modest measures that offer resolution to the spending crisis.