New car, no savings - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

New car, no savings

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YAKIMA, Wash -- For over 20 years, Suzanne Williams has helped people plan and save for retirement. But recently, she's seen something new. 

One of the biggest mistakes I see," said Williams, a financial planner with Yakima Valley Credit Union, "is people with too much debt, and living over their means.

Even though the economy is strong, savings rates in America ended in negative territory for the second year in a row. That hasn't since the great depression.  Americans are paying for their new cars, boats and flat screen TVs with credit cards and cash savings.

Williams says it's a dangerous trend.

"Short term savings should be used for your child's braces, snow tires or an emergency." 

Williams recommends every family have between three to six months of savings for emergencies. And to avoid making daily purchases like gas or groceries on your credit card.