I finally read an article in Business Week that nicely stated what I have been saying to my husband for years now:
*The negative savings rate in this country is going to ultimately hurt the economy. The Business Week article stated that a positive savings rate will eventually strengthen the economy. Another Business Week article predicts that hit number 2 to the financial institutions will come when massive amounts of unsecured debts from credit cards is unable to be sold and will be written off.
*This nation needs to *market* good old fashioned saving as "cool." The Business Week article mentioned the success of the the Just Say No campaign for smoking and other government marketing campaigns as models to emulate.
Turns out frugality is making a comeback as families who have been living beyond their means get their wake up call. The Business Week article titled "The New Frugality" profiled a family that got their wake up call that frugality was a necessity when they went to sale their home, which had doubled in value, and only pulled out $60,000. They then realized that they had eaten nearly $200,000 of equity on consumables.
(Hat Tip: Dave) The New York Times has an article this week, The Frugal Teenager, Ready or Not which shows teen discretionary spending is dropping (My word! At the peak the average US teen had been spending more on discretionary items than we do as a family). For teens that are unaccustomed to hearing the word "no" the new economic reality is going to be a bumpy ride.
For the first quarter in 17 years, consumer spending has not grown and is in fact negative . (Stop and digest this figure for a moment please). An entire generation of teens and young twenties has lived an entire lifetime without a period of time where cutting back was on the national agenda. This is really incredible the more you think about it. Marketing is powerful (with a capital P) and this generation has lived during an era of buy now, pay later, creative and even more creative financing (ARMS, interest-only, nothing down), "your home as an investment/piggy bank/ATM", "housing always goes up," leverage your credit to invest, etc, and now we as a nation are getting a taste of (great) grandma's personal finance rules.
The Washington Post had an article on consumers' changing habits which is no Tightwad Gazette, but perhaps more a demonstration about how weak the frugality muscles have become. Buying what you "can get some use out of" seems more like common sense than thrift. There is a story about a mother checking out books for her daughter instead of buying them new, a grandmother paying for her grandson's *Stride Rite* pair of shoes because the mother can't afford them (my husband would like to point out that putting the burden on someone else is in no way an exercise in frugality), and a college sophomore watching tv instead of buying (not renting, buying) movies, certainly underscores the fact that a mass marketing campaign on frugality and saving is in order.
Readers: If you were designing a mass marketing campaign on savings and frugality, where would you start? What slogans would you use? What points would you drive home? And, to keep with the Ortho part of the blog, what messages does the Orthodox community need to hear most?
Bonus: If anyone puts together a quality commercial of their own as a digital file, I will feature it on my blog if you tell me how to do that (sorry, I'm technologically challenged).