Is This a Time to Spend or Save?

[Mike 03]

There are two ways of looking at this economic crisis:

1. This a time to hunker down, save, pay off bills, eliminate debt and be as frugal as humanly possible.

2. Two factors make this a good time to spend in terms of stocking up on necessities or just plain good old bargains: 1) Companies--especially retailers--are on the verge of failure and are offering remarkable deals, and it would be foolish not to sensibly take advantage of these opportunities. 2) Anticipating inflation (once the dollar weakens due to excessive liquidity), it makes sense to buy now, stock up, and prepare for the future.

Spend or Save?

Are you doing any tactical, strategic buying now, or are you on the sidelines, hunkering down and practicing frugality?

[leftstreet]

1. I don't know many who have the luxury of asking themselves that question n/t

[4 t 4]

22. I was gonna say so many don't even have that question

but good luck to you if you do. I mean that.

[tridim]

2. Maybe I'm not looking hard enough, but I haven't found any bargains yet

Everything costs the same or more than it did a few years ago.

I've always been frugal, so it's a no brainer.

[skids]

10. Flash memory sticks are plunging in price...

...but they are not exactly an asset that will depreciate slowly.

I agree -- no great bargains right now. They keep saying it but I'll see it when I see a house I can afford, or any energy saving thing I could buy that would pay back in under five years (I did find some of those motion activated closet lights powered by batteries but that's chump change) or anything at all that would definitely retain its value and be useful in the meantime.

[uppityperson]

3. Both. Buy what I will eat or need in quanitity if good deal. Don't go into debt more.

Trying to pay off bills and save and be frugal. Part of being frugal is stocking up on what I need and will use if it's a good deal but not buying something simply because it is a good deal. Need is the prime word.

[Veritas_et_Aequitas]

4. You forgot potential deflation nt

[tbyg52]

13. Yep. And I have *no* idea which way it's going to go. Does anybody?

Real question.

[Veritas_et_Aequitas]

23. Nope. And I don't think anyone's trying to make a prediction.

Now THAT'S what makes me nervous.

[NRaleighLiberal]

5. We are behaving as we always have - we buy pretty much only what we need, and avoid

full price when possible, going for sales. Our only debt is our house...we learned long ago that "stuff" doesn't make us happy, but quality time with loved ones and connecting with nature - gardening, walking our dogs, reading a good book. We've been consistent - whether as destitute grad students, in the corporate world, or now, recently laid off/currently unemployed.

But that is what works for us, and we don't expect this to work for others - each person has to find their own way that works for them.

[napi21]

6. I think it depends on your personl situation. If you have debt and your job is at risk,

you'd be stupid to spend now. If you have no or little debt and your job or life status is stable, now is the time to find bargains. Take care of your self and your family FIRST!

[TahitiNut]

7. You spend, I'm saving.

:evilgrin:

[valerief]

8. It's probably a good time to move. nt

[Xipe Totec]

9. Save

Save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, save, ...

[Johonny]

14. the problem with saving now is

the interest rates suck. Your money is basically devaluing before your eyes. If you aren't in debt now is not a bad time to spend on deals rather than save for the rainy day. It's unlikely to rain any harder in your life time than it is right now. This is the big storm you've been saving for.

[Xipe Totec]

16. Cash is king

always.

Just because it's raining, doesn't mean you have to waste your money.

If you don't need it, don't buy it.

[Demobrat]

11. Save enough to live on for a year.

Once you have that go bargain hunting.

[azmouse]

12. I'm saving.

I want the money to pay my mortgage because if I couldn't keep my house where would I put those 'bargains' I bought.

[Warpy]

15. It's not a bargain unless you need it

That's something my mother dinned into my head and it certainly applies right now.

Cheap luxuries are still luxuries and should be passed up until that debt is gone.

[lumberjack_jeff]

17. Save. Cash is king.

I think the general consensus is that deflation is the bigger risk, and if (as I anticipate) the crisis in mortgage derivatives is yet to peak, then credit will dry up.

In fairness, there are two ways that could go. In that event, government will print money like crazy to solve it, which could be inflationary.

So, I guess the bottom line is what's the downside? In event of inflation, if you borrow and spend to purchase today's cheap goods, you make a few bucks (or avoid having to buy consumables at the inflated price). In event of deflation, you fail. Your stuff is worth less, but you're making payments based on the price at which you purchased them. Worse, the likelihood is that you'll be earning less, and are less able to pay your debts.

[NNN0LHI]

18. I am going to try to do a little bit of both and keep my fingers crossed

[slackmaster]

19. Do both, in balance

You need to save to protect yourself.

Everyone needs to spend in order to keep everyone else working.

[RB TexLa]

20. Save

[TheCowsCameHome]

21. Both, with balance.

Life is short. You may drop dead tomorrow.

Live a little, but don't go crazy with it.