It is difficult, as the recession worsens, to find further ways of economising. It is not enough to simply spend less and waste less. Also, It is harder for people to save because interest rates have dropped to practically nothing. So, there is less money, which drives people to want to spend less. However, this becomes a self-defeating cycle. Although this blog is dedicated to encouraging thriftiness, we must be practical in how we go about doing so.
I do not advocate that people go out and spend money they do not have. I would not want anyone to go into debt to rescue the economy. However, I would suggest that those with the money go and spend it wisely. That is the main gist of this blog. If we spend, let’s do it cautiously. The economy is at risk of going into deflation, which would worsen the recession. As prices fall, people tend to hold back and wait for it to fall to the bottom. This can hurt the economy.
If there is a big item you have been waiting for and it is now in your price range, it would be advisable to make the purchase now. This mostly concerns furniture, home repairs, etc. But the same can be applied to cars and houses. We’ve been hearing about the housing slump, but, unfortunately, there is also the difficulty in obtaining a mortgage. If you have the money and there is a house you would like, go for it. But if there is concern that you might not be able to make a mortgage payment, assuming you can get one, then don’t buy the house. Times are uncertain but if your prospects are good, take advantage of the moment. At the same time, don’t allow the economy to worsen because it may affect your chances later.
If deflation occurs, more companies may decide to close, making more people unemployed. The government may be struggling to find a solution to the economic problems, but people (who can afford to) need to take a personal step towards helping get this economy rolling again.