February 25, 2001
The New York Times
by Vivian Marino

There is no denying that the decade-long economic expansion has enriched many Americans. Yet huge numbers of people have little to show for those years of prosperity, other than the homes they own.

In fact, more than half of American households continue to live virtually from paycheck to paycheck, according to the Consumer Federation of America, which last week announced a campaign to encourage people to save and invest more.

The federation, a nonprofit group, released results of two studies showing the tenuous financial condition of many families. One of the studies, based on a federation-sponsored survey of 1,637 adults, found that 53 percent said they often lived from paycheck to paycheck. The percentage rose to 64 percent for households with annual incomes of $20,000 to $50,000 and to 79 percent for those with incomes of less than $20,000.

Over all, 60 percent said they needed to save more.

The other study analyzed the latest Federal Reserve survey of consumer finances and found that the typical American household had total net assets of $71,700 -- most of it in home equity. But net financial assets, or assets minus debt, totaled only $9,850 per household, including money in retirement savings plans. Among low- and moderate-income households, the median net financial assets amounted to less than $1,000.

Stephen Brobeck, executive director of the Consumer Federation, said he was concerned that a weakening economy would worsen the situation. ''A slowdown will persuade many American families to make a greater effort to pay off consumer debts and increase their savings,'' he said. ''But it will be more difficult.''

The federation's campaign, partly financed by the Bank of America, is scheduled to begin in Cleveland next month and in Kansas City, Mo., in April. It will be expanded nationwide. Vivian Marino