Liz Pullian Weston asks the question on MSN “What if we all got money-smart?” She says what if every household in the US paid off credit cards in full and never overcharged. Or they were saving 10% for retirement, and they had a emergency fund of at least 3 months. And we bought cars only after we had paid off the old ones, and never over-bought a house?
Apparently if we did all those things you’d think we’d be better off? And the answer is yes and no in many different sense. Short term, we’d all be feeling the pain of becoming responsible spenders and savers. Long term, well we’d have less debt, be able to retire earlier, and less bankruptcies. Great right?
I think so, but unfortunately another negative short term is that the US economy would go into the toilet. With the lack of spending that Americans are known for we might be in serious trouble. But long term it would be better for our economy because we wouldn’t be so dependent on foreign investors. Americans would be investing in our stock market with our savings. Also the article suggests that the booms and busts of our economy wouldn’t be so drastic. It would be a more even keel. Sounds good to me.
But how to get everyone else not reading this blog and other finance blogs to start caring about their finances? How to get them to being responsible adults? I don’t know if it can ever happen.
6 responses so far ↓
1 Ashley @ Wide Open Wallet // Aug 12, 2008 at 11:13 am
The media and advertising agencies would have to get on board.
2 Kristy // Aug 12, 2008 at 12:30 pm
I don’t think it will ever happen either. People want things and don’t think clearly about the long term financial impact. The US has a negative savings rate, so it doesn’t look good.
3 Jim ~ mydebtblog.com // Aug 12, 2008 at 10:43 pm
I don’t think the US would fall apart at all. If people prosper and control their money, they would be able to spend more, not less. I believe you would see more productivity and more spending, without concern for credit or debt. The only reason certain industries still exist today is because people don’t learn from the mistakes others make. If we teach future generations the basics of handling money, like don’t spend more than you earn, we will see a generational shift over time.
4 Abigail // Aug 13, 2008 at 1:54 am
I agree with those two. There are enough necessities in life that plenty of businesses would survive. And, as the Great Depression proved, entertainment is always a priority for the American public.
I think people have bought into the hype that if we don’t spend whenever possible, the economy will implode. But really, it’s just that when the economy isn’t doing well, people spend less. It’s cause vs effect.
5 Livingalmostlarge // Aug 13, 2008 at 11:56 am
Long term it might be better. However short term there would likely be a lot of pain.
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