What’s in your garage?
As our economy teeters on the brink of recovery (maybe), the question I have for the greater population is, “what did you learn”. As we are in our second year of “mini depression”, what are we doing different today than we were before the crash.
Did we sell the SUV and buy a scooter or a bike? Chances are slim that we were able to unload the Suburban because no one wants to buy it. Are we at least driving it less? What about our “consumer spending” in general. Monthly economic reports tell us that our spending is starting to “rebound”. If spending goes up, then savings goes down. Isn’t that how we got into this mess? As a country, we were spending 106% of our earnings.
Currently our net savings rate is on the rise. Is it un-American to suggest that maybe we should choose the frugal path in our daily decisions? We don’t like to be told “no”. We especially don’t like to tell ourselves no. We have confused “need” and “want”. Do we have a duty to support businesses small and large with unchecked spending, or do we have a duty to ourselves, our family and our planet? When faced with tough financial choices, we are unlikely to bite the bullet and turn the train around 180 degrees. It’s uncomfortable.
I was raised in a family that never had to do with-out. We pretty much always got what we needed and what we wanted. This sort of training tends to blur the line between the two. Thank you mom and dad for giving us a safe, loving and comfortable life. I have “the grass is always greener on the other side” itis. I wish I had a leaner less comfortable upbringing. It’s taken me a long time, and a lot of wasted money to appreciate what I really need in life. I happen to have a very good mentor right now. I must confess, I’m still not very good at it, but I’m hopeful for a full recovery.
Consider this scenario. What if this is as good as it gets? Maybe your current salary, which is half of what it was 3 years ago, is actually what you are worth in the marketplace today and forever. Maybe that’s really what you were worth 3 years ago, but the false economy also paid false wages. What if all these businesses that are getting by with greatly reduced numbers of employees never hire back those laid off? We should be budgeting, planning and spending as though this is the case. ” “Frugal chic” is the new buzz phrase. Let’s make it a race to the top of the savings rate.
Here is my economic recovery plan for the country. CLEAN OUT YOUR GARAGE! Put the cars in there. That is what they are for. If you took a calculator out to the garage and added up the cost of all that junk that you thought you needed, you’ve probably got a couple of house payments in there. Let’s have a national garage sale weekend! We could call it a cleansing. Give everything to your favorite charity. Let’s get our cars back in the garage. The difficult part will be resisting the urge to fill it up again. Think “frugal chic”.
Lessons from the crash should be life altering. Teach your children how to save and do with out. The generation that the great crash of 1929 affected most tragically is now dead. This could be why we crashed again. As a nation, we forgot how to save for a rainy day.
I have great hope and optimism for the future of the United States. I am convinced that from here forward, our national and our personal economy will be a more scaled down version of what it has been the last 25 years. I am not sure that we see this as a positive effort yet, but that will surely come. I’m not afraid to let the Germans or the Chinese have greater personal wealth and debt than I do,…………………………. are you?
Good talk,
Sam
