• People are saving more - but backwards?

    I still can't believe it.. consumers are getting heck for saving their money, because it hurts the economy!!

    Finally, consumers have gotten it into their heads that they need money saved. They're paying down debt and saving money. This is fantastic in my opinion.

    It would have been a little nicer if they had done this during the boom times, however, I guess people start being conservative when the news gets really bad. Better late than never.

    I heard a figure that was saying the U.S. population increased their savings by 4% over the last 6 months. This is almost unprecedented in recent history. It's absolutely wonderful... except....

    The problem is... all of this money saved isn't going into the economy to boost the businesses and retailers. Businesses rely on consumers spending themselves into the floor to keep afloat each month.

    So ... the question is: Should consumers spend their money just to keep retailers afloat?



    What's wrong with this picture?
    southtownstar.com
    By Lauren FitzPatrick on February 2, 2009 3:51 PM

    The U. S. Commerce department today released a report about consumer spending and saving in December 2008, and what came out is that Americans are stashing more money than they're spending.

    Seems like good news, right?

    The New York Times doesn't seem to think so.

    Squirreling away money and paying down debt may be good for one family's kitchen-table economics, but the broader economy suffers in the short-term when millions of families do it.
    A dollar saved does not circulate through the economy the way a dollar spent does, and these higher savings rates immediately translate into lower revenues and sales for struggling businesses. Still, some economists said the higher saving rate was a natural consequence of America's spendthrift ways.

    You can read the whole story here.

    It continues to talk about personal savings rates, which dropped to nearly ZERO during the last boom, when folks were tapping their houses for home equity loans, treating their dwellings like ATMs.


 
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1 Comments
On Mar 25, 2009, grocery store coupons Said:
It would be great if people could not only save money and spend it as well, but it can't be in two places at the same time. We all need to try to save something for the times we truely need it. We also need to keep buying at least the nessesities.

I use coupons to do both. With a little creativity and careful planning you can save far more with coupons than just a few pennies here and there. Use coupons for items that are already on sale for added savings. If your store doubles coupons, then you can even get things free.
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