Save or spend during a recession? - WALB.com, South Georgia News, Weather, Sports

Save or spend during a recession?

By Len Kiese - bio | email  

ALBANY, GA (WALB) - The U.S. economy is based largely on consumer spending and these days the recession has many of us spending less and saving more. It's a consumer catch 22. Saving more may be good for you but not so good for the economy.

The 'R' word is the main topic for people these days--the recession. "Definitely," said shopper Divya Kishore, "across the country, that's what I've been seeing."

It's a recession pitting two 'S' words against each other--saving versus spending. Kishore says it comes from uncertainty. "As far as long term investments, it's a little bit trickier these days. You don't know exactly which parts of the financial market are stable," said Kishore.

So for lack of stability, her family is scaling back and spending wisely. "Your basic necessities, groceries things like that," said Kishore.

"What's happening now is that people are feeling more insecure about their job situation and about tomorrow," said Aaron Johnson.

Today the trend seems to be hold on to what I have now for fear of tomorrow. The government reports a sharp rise in the percentage of American's saving money. Darton Assistant Professor of Economics Aaron Johnson says that along with more people paying down debt has an effect on the economy.

"As economists, we see that short-run having a negative effect on the economy because the more money spent paying down debt, that's less money being spent on big ticket items and going out to eat and those are all drivers to the economy," said Johnson.

"I believe that individuals should first and foremost, save money," said Financial Advisor Sammy Smith, Jr.

Smith says he understands why people are saving more.  He advises it along with having a healthy cash reserve. "We talk about spending to stimulate the economy. I believe that that's going to happen naturally. If you own anything, you're going to spend money eventually, planned or unplanned," said Smith.

But Smith says individuals can also help out the economy by investing some extra money into the volatile stock market a little at a time. "And then when you feel a little bit more comfortable and once the economy does start showing some signs of life, you can start putting more in," said Smith.

The economy definitely isn't in good shape. "It's pretty terrible and it seems like we're going to have to do a lot of work to get it back on track," said Kishore.

Economists hope consumers find the right balance of saving and spending to prevent the recession from deepening even more.

American's savings rate rose to nearly three percent in the last three months of 2008, up from less than one percent a year ago. At the same time, consumer spending dropped for six consecutive months in the second half of 2008.

feedback: news@walb.com?subject=SavingVsSpendingLK

 

 

  • More WALB News10 HeadlinesMore News HeadlinesMore>>

  • Pelham street signs will soon go up to honor State Championship team

    Pelham street signs will soon go up to honor State Championship team

    Thursday, March 30 2017 11:03 AM EDT2017-03-30 15:03:00 GMT
    (Source:WALB)(Source:WALB)

    The votes are in and Pelham has officially revealed it's new street signs honoring the girl's basketball state championship teams. The city polled community members on it's facebook page with two different designs.

    More >>

    The votes are in and Pelham has officially revealed it's new street signs honoring the girl's basketball state championship teams. The city polled community members on it's facebook page with two different designs.

    More >>
  • Sumter Co. Fire Dept. fights blaze at home

    Sumter Co. Fire Dept. fights blaze at home

    Thursday, March 30 2017 10:50 AM EDT2017-03-30 14:50:21 GMT
    (Source: WALB)(Source: WALB)

    Sumter County Fire & Rescue is on scene of a house fire off Highway 280 East. 

    More >>

    Sumter County Fire & Rescue is on scene of a house fire off Highway 280 East. 

    More >>
  • Making Marines: A full day at Parris Island

    Making Marines: A full day at Parris Island

    Thursday, March 30 2017 7:57 AM EDT2017-03-30 11:57:58 GMT
    (Source: WALB)(Source: WALB)

    WALB's Re-Essa Buckels got her first full day of Marine Recruit Depot bootcamp at Parris Island, South Carolina. Buckels was invited to attend Marine Corps Educator's Workshop to study how Marines are made. A Marine says "You have just taken the first step at becoming a member of the world's finest fighting force." Sixty educators, some from Jacksonville, some from Baton Rouge lined up on the legendary yellow footprints; the first place all recruits stop, be...

    More >>

    WALB's Re-Essa Buckels got her first full day of Marine Recruit Depot bootcamp at Parris Island, South Carolina to study how Marines are made. Sixty educators, some from Jacksonville, some from Baton Rouge, lined up on the legendary yellow footprints; the first place all recruits stop.

    More >>
Powered by Frankly