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I’m getting fed up with consumers – the little guys like you and me – taking the blame for the economy. We as a nation spent like crazy, lost a ton of money in the housing and stock market, and now are getting blamed for being careful with our money. “Even as the economic recovery plods ahead, many American consumers are refusing to come along,” says an AP story published today. “They’re not spending freely – and they have no plans to.”
The story makes it seem as if “spending freely” were a good thing. Craziness!
The headline of the story in my local paper (it might have been different in yours) is, “Economy’s new threat: frugality.” If so, here is the face of the enemy: Marjorie Feldman of St. Louis, who owns a home that lost 20% of its value and who saw her retirement account shrink by 15%. Marjorie’s confidence in the economy will “never” recover, according to the story.
That’s code for she’s not spending like she used to. Marjorie’s new frugal spending habits, which many Americans have adopted, are important because consumer spending accounts for about 70 percent of our nation’s economy. If Marjorie and others in her situation would max out their credit cards, we could see the economy recover, the story seems to say.
Or…we could recognize that our economy has an unhealthy dependence on consumer spending that is not sustainable.
Instead of spending beyond our means, we could budget and live within our means. We could save money to retire before we croak. We could save so that social security, Mediccare, and unemployment are not our only safety nets. We could save so our kids can get through college without crippling debt. We could save so that when times get tough we have emergency savings to rely on.
Americans currently save an average of 3.1 percent, down from last year’s peak of 6.4, the story says. I save 10-20% of my income because I feel responsible for my fiscal future. Why do you save?
May 3rd, 2010 at 1:23 pm
I believe many people are waking up to the fact that we’ve been “working jobs we hate so we can buy $#*t we don’t need.”
America seems to be full of unsustainable practices. Let’s all continue to strive for more sustainable practices; stay frugal and let the economy adjust accordingly.
We need to push back against an economy and media that continue to tell us we are at fault for this crisis, when we are really the ones suffering for the poor choices our economic and political leaders have made. Our true fault is our continued faith in this economic system and those who continue to tout its virtues.
May 3rd, 2010 at 1:59 pm
I, too, was very put off by this newspaper article. We are simply doing what overly-big government and reckless investment companies should have been doing all along… living within their means!!! Isn’t it amazing how dense politicians and other dimwits just don’t get it?
May 3rd, 2010 at 2:04 pm
We live in a service economy — but not everyone wants the services offered, or to go into debt for things they don’t need.
I save because I see no reason not to live below my means. And incidentally, I’m frugal where I can be in order to spend where I want to spend, and to be able to help others (charity, loans, gifts).
May 3rd, 2010 at 2:53 pm
Hooray! Another person who is frustrated by the prevailing mainstream media attitude (we no longer take a newspaper) for which they print what “they” want. Then the politicians give us “economic stimulus” and expect us to spend, spend, spend. After the stock market and housing losses, we need to protect ourselves by reigning in spending.
May 3rd, 2010 at 3:26 pm
The economy may be recovering, but my household hasn’t. I’m not going to spend money I don’t have, especially when our family is living on one income unexpectedly. I save because I don’t want to resort to living on credit if I find myself not being able to afford the necessities, like food and rent.
May 3rd, 2010 at 4:08 pm
From what I have seen, the economy is not better. There are still high unemployment. Credit is tight so the housing market & construction market is still down. Many people who have jobs don’t really feel secure and many others are underemployed. The news and the government want us to think everything is wonderful and we need to spend our way out of this recession. I am responsible with my money and it really bothers me to bail everyone because they spent more money than they had. Living on your home’s equity is not the way to get what you want. I realize there are also many people who lost jobs and couldn’t pay their bills and I wish there was some way to help them and not the ones who used their equity for new cars & boats, etc.
May 4th, 2010 at 10:00 am
I save because I have no faith in the local, state, and federal government to adequately provide any type of assistance. My future is 100% dependent on the earnings I bring in, amount I save, and how wisely I invest. Sorry to say, but I feel it’ll take 1-2 generations to restore faith in our government. Until then, I’m looking out for me, my family, and my friends and that’s it. Finally, GO ARIZONA!
May 4th, 2010 at 11:42 am
Right on @sick_of_spending, EllieD, Donna Freedman, Judy and Kathleen! It’s wonderful to know there are others who are fiscally responsible and believe rampant consumerism is not the answer. We will have a stronger economy as a nation of savers. How long do you think the frugal trend will stick around?
May 4th, 2010 at 1:07 pm
With any luck at all, it will last longer than my lifetime. Until the government and the money powers understand that people are sick and tired of being used and abused to further their aims and line their pockets, the sooner we’ll see a more solid recovery from this financial morass. A return to the acceptance of personal responsibility in all aspects of our lives is the only answer.
May 5th, 2010 at 9:53 am
I, like many others, plan to fund my retirement without the help of government. I currently save around 40% of my salary. If social insecurity pays anything it will just be a bonus.