Tuesday, January 27, 2009
Save or Spend?
Regular readers of Incite know that I am easily confused. The current econmic crisis hasn’t helped a bit. On the proverbial one hand I am told that the lack of credit is what’s causing the problem and that a good sign of recovery will be when I can borrow again. On the other hand, though, I am told that spending beyond my means (is this credit?) is irresponsible and simply makes the problem worse. For years I have heard the concern about my failure to save at the rate people in other countries do and how that is going to ultimately jeopardize my ability to retire “in comfort.” But literally moments after the terrorist attacks on September 11, then President Bush urged me to keep on spending as a first line of defense. To help the housing market, I need to buy a house. To help the auto industry, I need to buy a car. Ironically, there doesn’t seem to be any correlation with regard to helping the banks by depositing to my savings account (yes, I actually have one). There’s some sage advice from Steve the Elder and Steve the Younger in their comments on yesterday’s post, not to mention the “scolding” I got from my daughter in response to my January 22 post. All this I welcome as I grow in my understanding of how unprofitable thinking of the past has been and how very much I need to learn to think in new and different ways if I hope to find real solutions. That said, I think I’ll go to the break room and buy a candy bar.
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I'm not sure it will ever be quite as simple as "Save or Spend?" When it comes to finances, I think above all there needs to be balance.
ReplyDeleteSave, but don't hoard wealth beyond what you need.
Spend, but not more than you have.
Borrow when you need to, but not more than you can comfortably pay back.
And remember to give back, with gifts, service, time and talents.
Ideally, I believe our government should operate on these same principles, and I hope that under Obama's administration, there will be a return to financial balance. But I understand that in the immediate future, money may need to be spent to correct the extensive damage that has already been done over the past 8 years.
On another note - People have spent a great deal of time and ink discussing the vastness of a 1 trillion dollar economic relief package, critiquing how every dollar will be spent. I'd love to see that same amount of attention and scrutiny devoted to the nearly 600 trillion dollars spent on the Iraq war (so far).
I couldn't agree more. Your thoughts remind me of John Wesley's (the founder of Methodism) addage: "Earn all you can. Save all you can. Give all you can." He was speaking to people who were in pretty desperate financial straits themselves, and his emphasis was upon the empowerment of generosity.
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