Friday, August 20, 2010, AM | 1 Comment
Economists tell us to spend more to help the national economy get out of stagnation and help it grow. Personal finance experts tell us to spend less, pay off your debt and save more for your family and your retirement. Investing should follow savings with complete risk management on your part. Setting Your Financial Priorities Depend On Age And Income.
What’s it gonna be? National economy or personal finance. Is it a toss up? Could be. But if you take steps carefully as an intelligent person, you can help grow the national economy as well as your own personal financial well-being.
Economists say it has become the “new norm” for the consumers:
- Spending less
- Lack of faith in institutions such as banks
- Concern over personal financial well-being
- A widespread sense that such conditions will continue for the foreseeable future.
Up until May of this year, that was the condition of the consumers’ state of frugality. In May and probably some days in June, it seems that consumers got tired of “spending less and saving more.” Even those in the upper-income brackets were finding it particularly tiresome, and for some bothersome, to continue keeping a watchful eye on expenses.
Travel agencies reported that discretionary spending, such as vacations, suddenly was on the rise. People started to believe the financial crisis was over. Those who had jobs and more than 90% did had no problem spending in May. They thought as a nation that financial crisis was over.
That feeling was short-lived. Stock market was on the decline. The growing concern over the financial stability of Greece and a couple of other European countries prevailed on the consumers’ mind. It seems the economy growth was a mirage and at times felt like a hoax. Since later part of June, the consumers’ mind has turned 180 degrees spin from the beginning of May – back to spending less.
The consumers’ hands that went into their pockets to take out their credit cards and cash for spending remained in their pockets. How long will that lasts, of course only time will tell.
It is our “national duty” to spend but carefully and to help grow the economy. [70% of the national economy depends on consumer spending.] It is our “family duty” to save and help our family finances grow. Living the middle of the road might be our course for financial well-being.
In a Nutshell
If you want to help the national economy get out of stagnation and help it grow, then start spending but spend carefully. Don’t go out on a spending spree “to the last drop” of your money even though, for a while, it may taste good. At the same time, think about your family. They need your savings.