Paying Down Debt Should Take Priority Over Spending to Stimulate Economy
It's a catch-22. We're supposed to make it through tough economic times by saving - but then we get blamed for slowing down the economy.
What do I mean? In June, consumers reduced their credit card debt for the fifth month in a row, according to a Federal Reserve report. Total consumer debt in the U.S. dropped by nearly 5 percent. But instead of focusing on the good news, the media is speculating about how Americans are hurting their chances for recovery by not providing enough stimulus.
It's not like I was expecting a pat on the back or anything, but sheesh - a little understanding might be nice.
I'm aware that we're all worried about the economy, but folks shouldn't be chided for trying to survive. Hey, I'd love to go on an old-fashioned shopping spree at the mall - but, like many people, my current situation doesn't allow it. There are many other things that factor into the economic state - namely unemployment, but also the foreclosure crisis and the credit crunch. When you're dealing with losing your job (or even the possibility of losing your job), late mortgage payments and a mountain of credit card debt, spending for the good of the economy probably isn't an option - or a priority.
Here's the bottom line: this isn't the time to worry about the economy as a whole. It's time to focus on your family's financial situation. By paying down debt, you'll be able to keep more of your own money in the future. In turn, it will be easier to pay the bills and, when the economy picks up, you can worry about getting back to some spending (within your means, of course).
Wondering how to do it? Bankruptcy is often the most effective solution. You can find out for if a bankruptcy plan is right for you by signing up for a free one-on-one debt analysis with a Chicago or Atlanta bankruptcy attorney.
While saving and reducing debt might not be the preferred route of retailers, it's still a way to contribute to recovery. Remember, the economy is made up of consumers like you and me. Our financial health matters, too.