Budget Hater

Your Economy versus the Fed

Posted by Aaron Coleman
Jul 18, 2013

The Federal Reserve posted last week that consumer credit card debt increased in the month of May more than it has in over a year.  The reason they state for this is that consumers are confident in their jobs and willing to build up a running credit card balance…

That’s lame!  If you are feeling confident in your job and optimistic about the future, start saving more money.  Pay off your debts.  Build your emergency fund.  Start a college fund for your kids.  Make some investments.  Give to a charitable cause.  Set some goals and make a plan to achieve them.  Taking your “confidence” to the local Big Box and piling on debt for things that depreciate instantly should be your last choice.

The media and the government measure economic success based on how much people spend – regardless of whether it is cash or credit.  When they see credit card balances increasing, they think it is a good thing.  People are spending, they must be working, retailers are driving sales…the economy is working.  Which is all true.   However, that doesn’t mean what’s good for the economy is good for you.

There is certainly nothing wrong with spending money and doing the things you want to do and having the things you want to have.  We simply argue that paying for those wants with cash is a much better option for your personal financial life than paying with credit and running up a balance. 

Create your own economic report in the form of a Net Worth Worksheet.  It’s easy to understand: the bigger the number at the bottom, the better off your “personal economy” is doing.  Gain your confidence through sound financial management and making great choices!  

Aaron Coleman

Winning With Money

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