The economic news has been good lately, so Americans are spending more and saving less.
Americans consider deferral of gratification unnatural, which it is. Time was, however, thrift was considered a virtue. People sat at kitchen tables, calculating how to bring their outlays, for living and retiring, into alignment with their incomes. But eventually many people decided: This is no fun. Instead, let’s disconnect enjoyable spending decisions from tiresome facts about resources, thereby living the way the federal government does.
—George Will, The good economic news is actually bad. Here’s why.
The part about people sitting at their kitchen tables calculating how to bring their outlays into alignment with their incomes only partially applies to Andy and me. When we were first married Andy’s father was on the board of a credit union and he showed us an article entitled 10% of all you earn is yours to keep! We loved it.
We were savers at heart and had just spent all of our savings traveling around Europe (Andy had a job in France for 13 months) and coming back the long way for two months. We were ready to settle down and start saving again. We were perfectly happy living a simple life, so not spending much wasn’t a sacrifice for us.
We’re a bit appalled at the overspending by both our local and federal governments, but they didn’t ask us. The Washington Post article, The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year reminds me of the fellow who jumped off the Empire State Building. As he passed the 8th floor someone asked, “How are you doing?” He answered, “It’s going great so far!”
It may get messy, but no sense worrying about things we can’t control.
I agree, it’s too easy these days to dip into a line of credit, or put things we want to buy on a credit card. Eventually, though, it all catches up to us, and we end up paying more! This is something our parents never did. Seems stringent now, but I’m sure they had fewer worries as a result.
You say your parents — I assume you were the same? We never borrowed money except for the land, and we would have saved money by paying it off slowly and investing the payments, but we wanted to be out of debt as soon as possible. And as I wrote, we never felt we were sacrificing. We often put off buying things we could afford for a few years, and we enjoyed the feeling we had a choice. When we did buy them they meant a lot more to us. Old-fashioned stick-in-the-muds we were. 😀
I have written elsewhere about how the present younger generation in India is debt ridden because of easy availability of credit on the one hand and the need to be one up on the Jones as it were. While they are indeed in that mess there is a balancing factor of older people who do not spend and who still save and this hopefully will eventually influence the younger ones.
Hopefully your government isn’t going into as much debt as ours is. The stock market just dropped significantly because of fears of inflation and because the days of easy money seem to be over — interest rates are going up, which means a lot more taxpayer money will be spent on maintaining just our old debt, let alone the new.
after Bob died I had such rusty skills. the only jobs I held for some time were low paying. and the hospital was still (illegally I found out later) billing me. since he was able to sign himself in near the end it was legally not my debt.
but I had kept paying them anyway for half a year after he died. I felt obligated to them. until it dawned on me…
they also were running tests and x rays right up to the end. and they knew he was terminal. and it was not for research.
I finally decided WHY am I just struggling to live while I’m paying them for hurting him so? and the answer is always MONEY. for THEM.
at that time if I had paid myself first ‘any kind of percent’ the electricity would probably have been shut off!
so I see how people can get into the non-saving mode. luckily I’ve never liked ‘things.’ but the weight of normal needs can often seem overwhelming.
at least it was for me. it scares me now to be without a ‘cushion’ to help in emergencies.
Andy and I were poor growing up, which is why we were always happy to save and have a healthy cushion. One thing we were also taught was to be sure to have a “salable skill”. There are no guarantees in life.
when I was planning to move, I started a strict saving kind of way – so when I moved (frankly it was good to stay close by) I had enough. And I hadn’t dipped into another gov’t incentive (that’s now in my savings)
then I discovered that certain things weren’t eating up my budget as badly – even though my fortnightly income via my gov’t pension fund, really should mean I’m struggling (even with the top-up)… One of those reasons seems to be the way the P/Manag company bills me for the water; and the power even over winter seemed cheaper – probably because unit is better built.
I don’t have any kind of plan, nor a budget – other than I know my expenses + check my acct status… and somehow, I still have managed to go away – buy new stuff either personal or art – and not run down my main acct down!
some will say but you have free transport now (old age pensioner) but I had that before I moved…so that’s not really in equation.
but I don’t have 1000s upon 1000s in saving/other but I do feel better equipped if a disaster should occur say in the large appliance line….
I’m glad it’s working out for you. We didn’t have a plan either, just tried to be sensible and live at least slightly below our means.
I’ve never had any debts except mortgages, which thankfully are now all paid off. I was influenced early on by a girlfriend who said, as long as there’s more coming in than going out, I’m happy. Jenny and I have a fair amount of savings but by accident rather than design. Jenny had a highly paid job for a while and there was lots of spare cash which we just squirreled away.
I think the British government is borrowing huge amounts as well. They pledged several years ago to wipe out the national debt but it’s just increased by leaps and bounds.