"Going American"

My family recently hosted a wonderful young man from France through a foreign exchange program. Although we don't speak any French so we occasionally had to try more than once to understand each other, we made it work; and the cultural exchange of information along with a new friendship were well worth the effort.

One day he and my husband were discussing debt and he told my husband that in France the only debt people take on is for big items like cars and houses. (Sounds awfully familiar.) He said that it would never cross his mind to take out a loan for something small like a TV. He actually said that if someone ever talks about taking out a loan for a small item they call it "Going American." I don't know that it's such a great thing to have our country associated with frivolous debt. I can only hope that over time if more and more people are smart about debt that phrase will lose it's meaning and go out of vogue.

Where We Do Need To Spend Money

I realize that I'm a bit behind the times, but I recently watched An Inconvenient Truth and was pleasantly surprised by the movie. Although the information about global warming was depressing; Al Gore did a good job of leaving you with hope that if we make some changes we can reverse the effects of global warming. I live in Colorado and every time we go into the mountains we see the effects of global warming first hand. The pine trees are all turning brown and dying because our winters no longer get cold enough to kill off the larvae. This is a problem that all of North America is experiencing according to a recent article by the BBC.

As much as I preach money management, there are things that we must spend money on. I firmly believe that spending money on alternative energy, more fuel-efficient cars, recycling, and other items that will help stop and perhaps reverse global warming is very necessary. We don't all have the money to make the changes immediately, but if we start making small changes now, eventually they'll all add up. This is just another reason why it's important to manage our money; so that we have money to spend on the important things.

Responsible Spending Habits Slow Economic Recovery

Sarah Lockyer recently penned an article in Nations Restaurant News about decreased spending by consumers due to fears of unemployment. The article is based on research by Technomic Inc. which indicates that an economic turnaround will take longer because consumer spending is slower. From the article:

"The current broad unemployment rate, which includes not only those who have lost their jobs, but also workers who are underemployed or discouraged, has reached 15.8 percent and is rising, according to a July Technomic report from the firm’s consulting economist, Arjun Chakravarti. The prolonged climb of unemployment in the United States has not only affected the spending habits of those without jobs, but also has changed the spending habits of those who remain employed “by spreading psychological uncertainty across all workers in the economy,” Chakravarti said".

Although it would be nice if the economy would recover quicker, it will come back stronger and more stable if everyone increases their savings rate. I know that economists would be happy with a quick turnaround, but I for one am pleased to hear that people are developing more responsible spending habits.