Whether you rely on this blog for personal finance tips or learned how to manage your money at an early age from your parents, chances are good that you know the basics of saving and spending. To achieve a base level of financial security, you need to avoid spending more than you earn, and save what you can after all of your expenses are paid. 

Of course, as plenty of Chicago-area residents know, this is far easier said than done. Stagnant incomes and rising costs can quickly become overwhelming, even for the most frugal. As much as you may want to sock away a portion of your paycheck for an emergency savings fund, life tends to throw us financial curveballs: The car breaks down, or perhaps a family member breaks an arm or falls ill, resulting in unexpected medical debt. When a household budget is already stretched to the max, the credit card often comes to the rescue, and the savings account remains at a zero balance. 

A recent study from Bankrate found that only about half of American adults have more money in their emergency savings account than they do piled on their credit cards. About 28 percent of us owe more credit card debt than we have in savings. Even those in their prime income-earning years are more likely to fall in this second category. It can be very frustrating to keep hearing the dual messages of “pay down your debt” and “save for emergencies” without feeling able to make serious headway on either goal. 

The good news is that U.S. consumers do appear to be making progress, albeit rather slow progress. In the first quarter of this year, the average individual credit card balance dipped slightly from $5,376 to $5,325. Delinquency rates — representing consumers who were at least 90 days late on a credit card payment — fell, too, from 2.25 percent to 1.48 percent.  

Anyone who has climbed out of debt completely knows that it doesn’t happen overnight, and that reaching a zero debt balance and saving for a rainy day takes patience and discipline. In cases where debt is insurmountable, filing for bankruptcy is an additional option. The important thing to remember is that there is light at the end of even a long financial tunnel. 

Source: The Street, “Savings Rate, Credit Card Delinquencies Offer Different Outlooks,” Brian O’Connell, Feb. 19, 2014