Executive Summary
According to the Federal Reserve’s 2004 Survey of Consumer Finances, only 47 percent of American families currently have savings accounts, a decrease of eight percentage points from 2001. The Brookings Institution estimates that there are 8.4 million Americans with annual incomes of less than $25,000 and no checking or savings account.
What’s more, every year Americans pour their hard-earned money into slot machines, black jack tables, poker games, and other forms of legalized gambling. According to Tufano and Schneider (2006), Americans—including many low-income earners—spent nearly $80 billion on gambling entertainment during 2003, at a time when the national household savings rate was heading toward zero and would soon slide into negative numbers.
Of course, financial planners, policymakers, and economists agree families must have savings to survive financial emergencies, plan for the future, and retire comfortably. The challenge, then, is to combine the fun and excitement of gaming with the practicality and seriousness of saving to achieve the best of both worlds.