News You Can Use Distributed 10/03/06
According to A.G. Edwards 2006 Nest Egg Index rankings, Louisiana residents do not save well in comparison to the rest of the nation. Louisiana is ranked 49th among the states, ranked higher only than Mississippi.
"Louisiana also ranks 49th in per capita income," said LSU AgCenter family economics professor Dr. Jeanette Tucker. "States scoring well were mostly in the Northeast."
New Jersey came in first and is also the highest in per capita income. Louisiana’s per capita income is less than $25,000, and New Jersey’s is more than $43,000.
Louisiana has taken a hard hit in per capita income because of last year’s hurricanes. About 175,000 jobs were lost after hurricanes Katrina and Rita.
"The jobs lost were mostly in the New Orleans metro area," Tucker said.
Many Louisiana residents just do not know how to manage money, Tucker said. Legislation passed in 2003, however, requires financial planning integration in high school free enterprise courses, which should help. The LSU AgCenter provides workshops each summer for these teachers to learn how to teach personal finance.
"The AgCenter initiated a focus in training teachers to deliver financial information to students," Tucker said.
Although Louisiana residents have lower incomes than most states, Tucker said it is possible to save.
"Live beneath your means," Tucker said. "You do not have to make a lot to save."
Her No. 1 saving strategy is to pay yourself first.
"If you don’t see it, you won’t spend it," Tucker said. "Treat your savings like a bill and start saving early; it adds up."
When it comes to credit card debt, Tucker said it is the highest interest you will ever accrue. "Always pay more than the minimum payment."
By doubling your minimum payment, you can save more than half of what you would have spent in interest.
Other saving tips from Tucker include:
- Cut back on everyday snacks, sodas and candy. This can save you at least $365 a year.
- Collect coins. Put loose change in a jar every night, or even add a dollar now and then.
- Put money received in a bonus, raise or gift into your savings account.
- If your child grows out of day care, continue living as if you still pay day care costs.
- Plan a "nothing week." Instead of going out to a movie and dinner, take a walk or visit a museum.
- Take your lunch to work rather than buying lunch.
- Join Christmas and vacation clubs that allow you to put away money by the month.
- Max out your 401(k) plan by taking the highest percentage offered by your employer.