On Demand
Open Phones: Spending or Saving?
Monday, November 24, 2008
Prices may be low these days, but so are bank accounts. What's your strategy: are you spending or are you saving this holiday season? Comment below!
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Right now we are frantically paying down our credit cards, as half our debt is held by banks that have either folded or are being bailed out in the past 3 1/2 weeks...
Hoping to avoid any nasty surprises in the upcoming year or two if they decide to suddenly use the provisions of that lovely new law that Bush signed a while back that allows them to change your rates and terms at will so long as they send you an incomprehensible piece of paper covered in fine print - which they have been doing with alarming frequency the past few months.
Everyone needs to be astoundingly vigilant and careful, and check that the "fine print" changing their interest rates hasn't been cleverly hidden inside what most people consider "junk mail" from their credit card company - such as placing the rate change notice on the bottom detachable stub of a page of convenience checks...
So, we are definitely doing less spending on anything material this holiday season, and all savings have been diverted into our debt reduction effort...
I've only recently cut back on my spending but I've done so with bearish zeal completely uncharacteristic of me. My friends and I no longer go to bars, opting instead to buy alcohol (and lots of it) at the local shop and take turns making dinner at home. I have given up my $500 a month shoe budget, have stopped putting 10% of my salary into my 401K and have started prowling eBay and craigslist for good deals.
And all this for no real reason. My job is incredibly secure and I know I'm being reactionary but I find it vulgar to perpetuate my boom-time spending habits when so many of my friends have lost their jobs.
sorry I don't make enough to save. I just keep hoping I hit the megamillions, that's my retirement plan.
I was getting ready to spend about $3000 to replace my ugly old self-installed kitchen flooring, when things started to get bad. I've decided to wait and see (at least to see whether I get a Christmas bonus this year).
Definitely saving. Frankly, embarrassed to go shopping. We don't need anything and the economic future is too uncertain. Experienced down sizing and corporate cutbacks in the 1980s but worldwide markets and US businesses and banks weren't in the dire straits they are today. Too bad no one has a crystal ball.
If you have a little extra money now, give it to feed and/or house hungry/homeless Americans or Suki, with your savings on your monthly shoe budget, why not buy a pair of shoes for a school-kid.
My company announced on Friday that I'll be getting a 10% pay cut -- so saving, saving, saving. That means buying no Christmas presents. No dinners out. May not be traveling in the spring as planned. Not a happy time.
I am investing. I work 9-5 as an architect, but I'm starting a t-shirt line using my artwork. I am investing small amounts of money to build up an inventory of my product so I can sell it quickly and make decent money. I am taking advantage of my money to make more.
The company is called RA-NYC and it can be found at www.ra-nyc.com or on Facebook by searching for RA-NYC's fan page.
Paying my mortgage, my home heating oil bill, the bills associated with my house, for food, gas and tolls. What is there to save?
I am shopping in a big way....i just bought a third property yesterday! I couldn't sell my Bronx apt., so I am subletting it and buying a house upstate, taking advantage of the buyer's market. However I am not shopping for frivolous thins like clothes which have zero potential for return in the future.
I am not even sure that the choice is between spending or saving. The real issue is keeping track of cash on hand and incoming paychecks to be able to pay the existing bills without having to remove any money from brokerage accounts.
if we go shopping and buying most goods from china, does that really help our economy?
Oh, and also I'm making charitable donations for gifts this year (plus some home-made ones to take the sting out).
I've always been a saver, but I did recently reduce my 401k contribution. Lately, I've been doing a LOT of shopping. I have a pretty secure job, I don't have kids and my bills are low, so I feel like I'm doing my part to boost the economy and at the same time doing something I love -- buying new shoes.
I'm investing in my education again. With everyone's chips in the air I'm going to study something that I've always wanted to but never had the nerve to move on.
I am scraping to shop for necessities, have been dipping into meager savings, and pretty much trying not to freak out. Not a good time to be going through a protracted divorce, watching my elderly mother's stocks ( which support her) tank, her only other asset being a lovely house which will never accrue it's worth, having my work-week cut by 20%....
Thank goodness I like tinned fish!
My wallet is firmly zipped shut these days. My husband and I would like to buy a home in the next 18 months and with the prospect of easy credit gone and the likely requirement for a heftier down payment, we don't really turn up the heat or go out to eat or purchase anything above the bare necessities. Instead of getting desserts, we make make, instead of buying bread, we fire up the bread maker. Its amazing how much money per week can go into our savings account with small but consistent changes to the household budget.
Your webpost says it better than you are saying it on the air. It isn't shopping, it's strategic spending we should be thinking about.
Think about spending the same way we think about charitable donations. Allocate those dollars where you think they will do the most good. Certainly save, but also spend where it makes sense.
For example, we're making every effort to gut renovate our kitchen - a substantial expense, employing a local architect and contractor, allied trades and purchases.
Walking the streets and seeing money moving is no surprise. The media have taken Orson Welles' lesson to heart -- every "crisis," made as spectacular as possible, brings in readers, listeners, viewers.
We deserve calm, level-headed analysis, not let's-see-how-many-second-third-and-fourth-tier-jobs-to-be-lost-we-can-hype panicked headlines.
We are having to be careful with our spending, so we are prioritizing by cutting out some unnecessary/frivolous items, and focusing on maintaining our charitable contributions at our usual annual levels.
We are also buying Art instead of toys and junk. We are buying as much as possible from individual and indie artists (visual arts, handrafted work, music, performance tickets), to put the money we spend into a "bottom up" strategy of helping the economy.
I plan on shopping AND saving. Make sure I'm putting a little away each week (even if it's only a little) and spending my money on investment pieces that I'm going to keep for a long time. Instead of buying a bunch of cheap junk at Ikea, Target or H&M that I might pick up on a whim, I'm being much more thoughtful and buying pieces of good quality that I won't need to replace.
I'm always saving and spending conservatively as I have been for years. I have no credit card debt. My wife and I have a good fixed 30 year mortgage (that we paid a broker to find). I have never owned any stocks and I am sick thinking that my tax dollars have to bail out a bunch of gamblers!
I am not sure the choice really is between spending and saving. The issue is keeping track of cash on hand verses incoming paychecks to be able to pay the existing bills without having to liquidate anything in a brokerage account.
Hi Brian! I just got a raise at work, which I realize is a rare occurrence these days, but I am still saving. I work in the fashion industry and every single brand has gone on sale early this season. This is getting people out to buy things but they're only buying things that they need if they feel like they're getting a good deal. J. Crew had big lines this weekend, but it always does this time of year and i think the difference is that people are still buying, but they have fewer items. I will really find out when we have our sample sale next week!
I'm spending more moderately, definitely reducing spending.
On the other hand, when I do go out to eat or take a cab, I try to be as generous as possible in tipping. I think you should stay home and save if you can't afford to tip properly.
I am doing as I have ALWAYS done (as was taught by my mother to do) I spend as I can afford to spend - I do not over extend my debt - EVER. I think it is ridiculous to encourage our society to continue to accumulate debt!!!! Get the $$ to bail us out from all those FAT CATS in the banks!!!!!
I am scraping to shop for necessities, have been dipping into meager savings, and pretty much trying not to freak out. Not a good time to be going through a protracted divorce, watching my elderly mother's stocks ( which support her) tank, her only other asset being a lovely house which will never accrue it's worth, having my work-week cut by 20%....
Thank goodness I like tinned fish!
Correction to my previous comment:
My wallet is firmly zipped shut these days. My husband and I would like to buy a home in the next 18 months and with the prospect of easy credit gone and the likely requirement for a heftier down payment, we don't really turn up the heat or go out to eat or purchase anything above the bare necessities. Instead of going out for dessert, we make cake, instead of buying bread, we fire up the bread maker. Its amazing how much money per week can go into our savings account with small but consistent changes to the household budget.
I think this question obscures the fiscal policy questions. Government policy is what our society does in the collective interest.
The curious think about the American economy is that luxuries (e.g. big screen TV's) are cheaper than many necessities (e.g. health care).
I bought an apartment in the UWS, just as the mortgages froze up, now I'm renovating the apartment, as I watch my savings cut in half. When I finish, I'll have a nice apartment which I will never leave. I'm spending money like I never have in my life, so tell Thomas Frieman, I'm doing my part in consumer spending. I'm selling stocks, at their 100 year low to pay for these things, rather than go into debt
My credit cards are all paid off, and I still have last year's tax return in my savings account. Got to get a new computer, flat monitor and new tv, but don't want Bush to get credit for my dime in this quarter. Once '09 arrives - the Year of Obama - I will go out and spend on the big ticket items. If I could find a way to buy xmas gifts after the first of the year, I'd do it, too.
Yesterday, our family attended a performance of The Seagull, which played to a full house. It certainly did not appear as if Broadway is being adversely affected by the economic downturn. We plan to continue attending the theatre but will only do so by purchasing tickets that are on special offer. We paid $260 for three tickets on discount for yesterday's performance; had we purchased premium seats, it would have cost us about $750. We are going to spend but will continue to live within our means.
I'm almost always in saving mode (except when traveling), live miserly in Inwood, never had a car or a mortgage. Renting both has worked out well. I learned my lesson early in the 1970s when I first moved to NYC and taxes took out so much of my salary and I'd started taking courses at the New School, and a merchant actually cut my credit card in front of me on orders of the card company. So after I got rid of college debt, I've had no debt.
I know that's way out of step with Baby Boomers and generations after that... The whole society needs to change with its view that we can have, even DESERVE, as many goods and services as we want. This goes along with our generalized view that there are sufficient natural resources for unlimited plundering. Jerry Brown (CA) said it well, small is beautiful. Remember, we're on Spaceship Earth.
My apartment is crammed with stuff. So are the homes of my family members. I'm going to be spending, but on charity donations and toy drives, etc. Much better for all involved.
Once I figure out how to become employed again, once I figure out how much I can renegotiate my mortgage payments for, once I pay back the balance due on my condo dues, then I'll think about going shopping.
Can I take a moment to thank multi-millionaire Thomas Friedman for recommending that we put a little more money on our credit cards for the good of the country? That was so big of him. Thanks, Tom. You've really got your finger on the pulse of America.
Seriously, that man has never been in debt. Not one dollar, not one minute of his life. He has no idea what it's like, and he doesn't care. Why in the world is his opinion worth anything?
Spending but no consumer debt - we pay off the cards when the bills come in.
But here's the thing, they want consumers to spend, how about re-installing consumer credit card debt as an income tax credit?
I am in the middle class, and have been saving and putting a fair amount away monthly for the last 18 years,
much of that in mutual funds. After seeing huge losses in my funds, while I am still a careful consumer- I also have a larger than usual desire to spend. I have lost so much in the stock market, at this point I'd rather have real goods than deal with the volatility that we have been seeing!
I'm an American who moved to India 3 years ago, but was just in LA & NYC. Like Brian and others, I felt like Americans were spending like usual (went to Disneyland and my favorite NYC restaurants) while those here in India are panicking.
i am pledging to buy only handmade items this holiday season, to support independent craftspeople and designers instead of greedy corporations! i'll be shopping on Etsy.com where you buy direct from the hand makers.
http://www.buyhandmade.org/
http://www.etsy.com/
http://www.hodgepodgefarm.etsy.com/ (my shop!)
Not for nothing, but I have a local business and am participating in the Bryant Park Market. My items are made in NYC, printed in NYC, and are all 100% PCW recycled.
When you are going to shop this holiday, consider independent design.
Personally, I can say that every dollar that goes into my business, comes out the other side to support a local print shop, an American company...and the local economy.
Please consider who you are buying from and where it comes from. By making more informed choices, our dollars will go further to help our economy when we do spend.
Thanks.
Savings? What's that? You mean having EXTRA money to put aside? Ha! What a concept!
We are spending slightly less, but are being more selective on what we purchase and where its from. Whatever happened to the "Buy American" mantra of years past? The economic downturn dovetails nicely with a locavore movement - not just of food, but goods too. If we support/regrow American manufacturing and production, as well as public infrastructure works, we will spur innovation here at home - ultimately investing in ourselves and our future.
hm. I guess since cal from williamsburg can list his site, i'll list ours. I thought that might be considered spam...but, it's worth a shot.
We're at the 6th Ave side of the park and we are called Mixed Company.
http://mixedco.mateoilasco.com/
http://www.susyjack.com
consider independent design this holiday.
I consolidated my credit card debt through a not-for-profit program and spend 15% of my take home pay on that. The interest was lowered to 6% and it is worth the small $30 monthly fee.
I stopped my mental health therapy since my therapist doesn't take insurance and although she doesn't overcharge, I couldn't afford $150 a session.
I bought an ipod and will listen to free downloads to compensate for the lack of therapist.
I don't purchase meat or eat out. I did buy a winter coat for the first time since 2002 - on sale at Macy's for <$150.
I am borrowing $1000 from my 403B to paint my apartment and to cover holiday gifts and travelling.
at age 48 i have given up on affording a home in nyc, wired my savings to a german bank, gaining 20,000 extra in Euro buying power due to the unexplainable rise of the $ against the Euro in the last 3 months, buying a 1600 sq ft raw loft in the heart of Kreuzberg for 110,000 euros. That's my solution to the unaffordable housing market in the usa.
tim
brooklyn
Definitely saving. But I've always been good at that and don't spend beyond my means. I'm a freelancer, and my work has recently reduced to a trickle, so I have to be more careful right now. Things I want I will try to find on eBay or at second hand stores. I don't like spending at restaurants, but will spend on good-quality groceries and cook at home.
We am saving but also spending on what we really need and planned house projects or a trip to see my family cross country. But I've found that I've lost the desire to "buy". I look at all the catalogues I get and just don't care anymore. How much stuff does one need? It's only stuff. Alot of us are refocusing on what really matters in life, family, friends, experiences, which seems to be at cross-purposes to keeping the economy going.
Why can't the goernment create some sort of public works progect, like a dam,bridge,monument or maybe a fence on the border.Don't give them money,give jobs!!!
I've always saved, so my habits haven't changed currently. Tom Friedman's response that spending is what the economy needs now, but he personally is saving, urges me to shout the question: WHY DO AMERICANS ALLOW THEMSELVES TO BE RULED BY AN ECONOMY THAT IS AT STRUCTURALLY AT ODDS WITH THEIR OWN NEEDS? Putting economists virtually "in charge" of human needs is like asking your gas station attendant to do your triple-bypass.
CHAIRTY GIFT GIVING - I know this post is post-topic, but mabye someone will take note:
Mentioned on the show: Charity gift giving and the question of how appropriate was it for the gift-giver to designate a specific charity, perhaps to one which the receiver may not have chosen to donate to herself.
There is one group that I know of which offers a solution. www.CharityGiftCertificates.org.
The gift-giver makes a donation to Charity Gift Certificates.org, then gives a gift card indicating the amount that has been donated to Charity Gift Certificates.org to her friend. The reciever/Friend then goes to the Charity Gift Certificates.org site where she can choose from among 100 different groups to designate where she wants the money to go.
I've done this a few times and everyone seems to enjoy channeling the money to whatever has personal meaning for them.
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