AMERICANS ARE SAVING MONEY RATHER THAN SPENDING IT
The tumultuous economy has had such an effect on consumer spending, or more accurately the lack of it, that the Federal Government is considering pushing through another round of tax breaks and spending to help stimulate the economy. That Americans aren’t spending their stimulus checks and are saving the new found money instead of pumping that money into the stagnant economy has left the Obama administration seriously considering the idea of pumping another round of stimulus money into the damaged economy to get it moving again.
The figures indicate that American households increased their savings rate to the greatest level it has been in more than the past 15 years, due in large part to the stimulus money that the government had hoped would bolster the economy. Instead most consumers opted not to spend the money, but rather to bank the money in their nest eggs with the present fears of continued high unemployment. Economists predict there will be a continued trend for conservative spending even after the economy starts to rebound because this particular recession was so deep and far reaching. We as a nation learned some very difficult lessons from the Wall Street and subsequent economic collapse we have endured, these lessons we are not to forget any time soon.
Prior to the recession Americans were spending $1.15 for every dollar they earned with a buy now pay later mentality and very little if any at all in their savings account. This will be a new area of fiscal responsibility the likes of which we have not seen since the Great Depression, according to the leading economists around the country, as we have seen the enormous shift in the mindset of American households.
Families today have had to make drastic adjustments to their way of thinking about their financial priorities, opting to buy only what they really need as opposed to what they want. Record numbers of people wisely sought out the assistance of credit counseling agencies to help them reign in their spending and create a budget plan they could live with, as well as to help them with debt management issues.
So many people who were on the brink of foreclosure or bankruptcy and feeling hopeless about their financial troubles were pulled back from the brink with the help of a reputable credit counseling agency. Whether it was a simple matter of debt management and budget planning or as detailed as the process of debt consolidation or debt settlement we have learned a new found intelligence regarding our spending and debt management habits that the top economists say will linger long after the recession is over.
The savings rate which was hovering at about zero in 2008 surged to 6.9% percent, which is the greatest level of saving since 1993 and economists say that we can expect that trend to continue as the economy slowly recovers. The best that we can do as a whole is to practice wise debt management, seek credit counseling when we cannot manage our debt on our own, and never forget the hard lesson learned that you can’t continue to live above your means without having to pay the piper.