Comments on: Americans Starting to Save at the Worst Time?

By: Saver in the City» Saver in the City’s five for Friday

Saver in the City» Saver in the City’s five for Friday — Fri, 06 Feb 2009 12:39:41 +0000

[...] Apparently, we can’t do anything right. Just when the government needs us to spend, spend, spend, we do a 180 and become super savers. Your Money Relationship takes a look at our newfound frugality and whether now is the worst time for Americans to start to save. [...]

By: Rick

Rick — Wed, 04 Feb 2009 00:14:16 +0000

I am spending about the same, which isn’t very much. I put my last stimulus check in the bank and that’s where the next one will go. Let homes that need to be foreclosed on be foreclosed. And remember, you can sell anything if the price is right.

By: Adam

Adam — Tue, 03 Feb 2009 17:37:51 +0000

@Miranda – You have some great points there. I agree that times have changed and we put ourselves in this mess by relying on consumer spending. It seems to be the answer for everything now. However, I really don’t think we will ever get out of that mentality. I just cannot see it happening unless there is a nationwide initiative to educate everyone on personal finance matters. Can I see that happening? Not likely!

@Yana – I agree with you about the severity of the economy. I really do not think it is as bad as the media makes us believe.

By: Yana

Yana — Tue, 03 Feb 2009 17:28:48 +0000

We are saving less, because my husband’s hours were cut and we have less income. We save as much as we can, keeping in mind that this is still a good time to purchase certain things we might not be able to in worse times. Even with less income, things are not that bad for us. We’ve had much worse times when the economy was “good”. We are out of sync that way.

Things like the Superbowl and watching bidding on eBay make me think times are not that bad, at least not what I’d call bad. People are still commuting and spending much more than they need to.

When I heard that cigarettes are going to go up .61 cents per pack plus more tax on tax, I thought we’ll have to balance that out somehow. We are both smokers. I didn’t make any New Year’s resolutions, but in 2009 I have quit purchasing alcohol for our household (which means me, because my husband doesn’t drink), and we have not eaten out at all. I just may keep that up to make up for the punitive cigarette tax that will most likely be spent in a way that helps nobody.

By: Miranda

Miranda — Tue, 03 Feb 2009 16:57:15 +0000

One of the main issues is that we changed from an economy that was mostly stable and built on exporting to one that relies (70%) on consumer spending. We now have a huge disconnect between what is good for the economy and what is good for individual finances. We traded gentler up and down cycles (which are natural) for more severe down cycles that occur after periods of unsustainable and contrived growth based on debt-fueled consumer spending.

In the long term, if we want to fix this, we need to change the entire way we look at the economy and the way we look at economic cycles.

By: Adam

Adam — Tue, 03 Feb 2009 16:03:32 +0000

@Matt – There is too much junk in the stimulus plan right now. I think the actual “stimulus” part is only about half of the total cost. Where is all of the crying that was going on during the bailout of the banks? Strange world we live in!

I hope we do come out better after this. This economy will help everyone realize that credit isn’t everything, your job is never secure, make sure you read the fine print, don’t count on the government, etc. I could go on forever!

By: Matt @ StupidCents

Matt @ StupidCents — Tue, 03 Feb 2009 14:19:51 +0000

We truly are in a vicious cycle. Everyone is saving more because their future job security is uncertain. Since we no longer are spending money, companies start to cut jobs or close entirely. Now there is more competition to try and find work causing wages to be lower. I believe the downward spiral will continue until the housing market rebounds.

We’ll see in the coming days what the stimulus will ultimately consist of after both parties have their say, but will it be enough?

Will we better off for the future? I hope so.

Stupidly Yours,

Matt