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This paper focuses on the recent decline in the American and how American's saving habits are in need of change. Currently many Americans do not own stock, let alone their own home and many college students are facing credit card debt. The average American has a negative savings rating mean they spend all of their disposable income and then dip into their past savings. At least 45% of college students are in credit card debt and this number is likely to continue to rise.

The fourth quarter college plans have continued to decrease due to the economic crisis. The assets in 529 college savings plans fell over 21% from last year. Investors are optimistic and the data shows that people are still attempting to save for college. Unfortunately many parents do not know how to save or how much they will need for college. College expenses continue to increase faster that wages and have increased at a rate of 5.7% a year. If this trend continues the gap between income and college tuition is going to be even more difficult to cope with.