Millionaire or Bust header image

MOB #77 – Should Patriotic People Spend or Save?

February 16th, 2009 · podcasts

On this episode of Millionaire or Bust, I start off by announcing that I’ll be doing the show solo for the foreseeable future. Talli is on hiatus due to the demands of her other podcast and blog, Being Healthy for Busy People and work and the baby. So, I’m encouraging you all to take a more active part in the show and send me feedback & comments that I can use on the show.

This week’s topic is “Should we spend or should we save?” I set the stage by discussing a few news stories, including the biggest news of the week that the Senate passed a $787 billion stimulus bill.

Then I talked about an article that says that the average price of a wedding has dropped nearly $6,000 as couples scale back.

Then in what looked like good news, I talked about the foreclosures easing in January by about 10%. Unfortunately, that was mainly driven by the foreclosure moratoriums of Fannie Mae and Freddie Mac.

With that poor news, I jumped into a story that detailed the extreme measures some people have gone to earn some extra cash to make ends meet. With that extra cash, I guess Starbucks wants us to buy some of their new cheaper coffee-and-food combos. That seems less likely though since, US jobless claims were above 600,000 for the week.

Luckily, retail sales rose unexpectedly in January, but only by 1%. The economy hasn’t turned around yet though because closures in Nebraska, Florida, Illinois and Oregon bring the number of bank failures to 13 this year as the financial crisis continues.

All this news led to the net worth of American families falling drastically according to the last story. It also led to my conclusion on whether you should spend or save in this economy. The answer? It depends. Give the show a listen to get the details.

If you enjoy Millionaire or Bust, please head on over to iTunes and give us a nice review. If you have some feedback on how to make the show better, shoot us an email and help us improve the show. We appreciate all your comments. Thanks for listening everyone!

Tags: ···

6 responses so far ↓

  • 1 ctreit // Feb 18, 2009 at 3:51 am

    Good podcast. There is only one statement that I would critique. You say that if you are patriotic go and spend some money. (I am paraphrasing.) I think that being patriotic is having sound finances. Putting your financial house in order could be a problem for the economy short term in the current situation, but long-term you are helping yourself and your country. That is the only way you can be patriotic.

  • 2 Maria Isabel // Feb 19, 2009 at 11:46 pm

    How many of those people that are saving 1%, are actually contributing to a 401k, IRA or IRA Roth?
    Perhaps this is where they are saving their money and it doesn’t show as savings.
    Of course most of them have taken a terrible beating, should they perhaps cut back on their 401K and put more into their savings?

  • 3 Hermanus // Feb 20, 2009 at 9:58 am

    How to spend wisely and stimulate the economy?
    Some suggestions are: check weekly food specials, in Wednesday’s newspapers. Sunday’s newspapers always has the specials for almost everything else that you may need. All you need to know, what is usually charged for items before they go on sale, to know that you have made a good purchase. Never buy anything until you know the everyday price of an item.

  • 4 David van Sunder // Feb 20, 2009 at 10:28 am

    @ctreit Those are good points. In case I was a little unclear, I wasn’t trying to say that everyone should spend money to be patriotic. I was saying that we shouldn’t listen to people who say that. In fact, I said in the podcast that to be patriotic, you should take care of yourself, get rid of your debt and build up an emergency fund. If you’ve done all that and have retirement taken care of and a steady income stream (i.e. You’re wealthy.), then by all means take some of your extra and stimulate the economy with it. If you’re not in good financial standing, it’s not your job to spend money. It’s your job to stabilize your situation and pay your bills. That’s your part in strengthening the economy. Thanks for listening to the show!

  • 5 David van Sunder // Feb 20, 2009 at 10:35 am

    @Maria Isabel – Actually those numbers are supposed to track all savings whether it be 401k, IRA, savings accounts, etc. They get the numbers by taking all the money that is made and subtract all the money that is spent on good and services, but not investments or bank accounts. So, the numbers really have been that bad if you’re just trying to track what portion of a person’s current income is being saved/invested. I wish the numbers were better.

    Now as for whether people should cut back on their retirement investing, that’s not such a good idea. Those retirement accounts you mentioned provide tax savings which allow you to keep more of your money in the first place. Now might be an especially good time to invest with prices at a little over a half of the all time high. Of course, how you invest that money is up to you and your financial advisor based on your situation, your risk tolerance and how long you have until retirement. At the very least, putting the money in a retirement account with safer investments would allow you to take advantage of the tax benefits they provide. Hope that helps!

  • 6 David // Feb 20, 2009 at 10:41 am

    @Hermanus – Those are very goof money saving tips. We all could save quite a bit of money just by timing our purchases to sales, using coupons and overall just thinking about what we buy rather than just throwing things in our carts. I’ve known people that cuts their food bills in half. Thanks for the tip!

Leave a Comment