Prioritize Your Own Economic Health Over the State of the Economy
Sometimes it seems like there's no way to win.
Americans are saving at the highest rate in years and paying off debt in record numbers. Recently the Federal Reserve announced that June saw the fifth straight month of reduced credit card debt. It seems like frugality has finally caught on.
That sounds like good news, right?
But some economists fear that all that saving is going to squelch economic recovery. When consumers keep their cash in the bank (or worse, under the mattress), it doesn't get spread around to create more money - at least, that's the economic perspective.
I can see their point. But I think they're failing to take into account some important factors. First, economic growth isn't just about consumer spending. It's about unemployment - which is currently hovering above 9 percent. It's about real estate and the foreclosure crisis. And it's about credit - lest we forget, we might not be in this mess had we not outspent our means.
Considering all the above, the idea that we're choosing to save rather than spend is laughable. Hey, if I could afford to blow my paycheck on stuff - clothes, electronics, meals in nice restaurants - I would. Trouble is, I can't. And neither can most of the country. When faced with losing your job or house, paying the bills kind of takes precedence.
Look, we all want to see this recession end, but reverting to spending beyond our means isn't the way to do it. Adding to debt you already have is just going to increase the odds that you'll lose your house, wreck your credit and wind up broke when the economy improves. So instead of worrying about the financial state of the economy, worry about the financial state of your family - and then do something about it.
Most folks have trouble paying bills for the same reason - debt. Whether it was unemployment, medical bills or another rough patch, something caused you to spend more than you could afford, and now you're stuck paying interest to the credit card company, forcing you to take on even more debt. But there's a way to break the cycle - bankruptcy. Filing will stop foreclosure and help you create an affordable payment plan for paying down debt.
Wondering if bankruptcy could help your situation? Find out for free with DebtStoppers - just sign up for a complimentary personal debt analysis with an Atlanta bankruptcy attorney. As a consumer, you're part of this economy - and your economic health matters, too.