As difficult as it may have been the last few years going through the financial downward spiral, I have felt all along that it was in many cases, exactly what the country needed. Every once in awhile, you need to go through the hard times to teach yourself to clean up your mess. Consumer spending (charging) in this country was out of control. Not until people hit rock bottom were they going to realize that you can't live life that way. My concern however is that while it may have temporarily got the house in order, many are heading back to their old tricks. When you fear for your job and the loss of your home, you stop buying. But when reports are not as gloomy and you don't have that panic, slowly but surely the card comes back out of the wallet. I know I changed my behaiors a few years back and fortunatley I have stayed the course. I started living the theory that if you can't pay cash, you don't buy it. Unfortunately I think it's going to take yet another shake up for people to learn the lesson once and for all. I just hope that enough of the credit companies shut people off when they had the chance.
Yes that magic plastic can be very tempting when you see goods on 'sale'. Specially during the coming holiday season in December. I was wondering what the ratios looked like for the second half of the year. That's the time many of us can't resist the holiday offers.
What I worry about are the consumers who are following the lead of the government: brorrowing money to make payments on debt. I'm concerned it could become a greater problem as interest rates rise and low rates on Credit Cards and home equity lines climb, creating a squeeze for people struggling to pay their bills.
If consumers are borrowing more money to pay off their debt it will become a never ending vicious cycle of debt. I sincerely hope this is not the case. I hope the reports are right and people are are actually paying off their credit card bills.
After this painful drawn out recession consumers are feeling that tomorrow may not be better than today. Taking on credit and making purchases on credit is no longer en vogue. The unemployment picture is frightening to individuals who have jobs and even more frightening for those searching for jobs. Until we some stability in the job market we won’t see these numbers turn around and consumption will continue to decline for certain categories of goods and services.
I agree with your comments. Unemployment is still high and consumers are still cautious. The question is what happens when things get better? Do people return to their spending and borrowing ways?
The transistion continues to gather pace as we move from a Country of Consumers to Savers.Whoever can is choosing to pay dowm their debt and move onto a simpler and more basic lifestyle.
The uncertainty in the employment market ensures that even the best of us are nervous of spending beyond our means.
This is good news and shows we are on our way to becoming a more responsible country.Now only if the Fools in DC would get it and cut our Budget Deficit in half.
It will be interesting to see, when the economy turns around, if consumers do go back to their old ways of using credit to live beyond their means.I had a “personal financial crisis” about ten years ago but I dug myself out of that hole and had no debt, except for my mortgage, by the time the economy went south.I personally will never forget how that felt but unfortunately, because of the economy and an extended period of unemployment, I find myself close to where I vowed never to be again.I can’t help but believe that I am not alone in this.
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