If you’re really paying attention, life can be a very odd experience.  Especially when it comes to money.

For example, in troubled economic times like these, front-page newspaper stories regularly quote economists expressing concern that the personal savings rate is going up.

I still vividly remember reading one such story during a previous recession.  I had to blink my eyes and reread an economist’s comment.  Sure enough, he was deeply worried that people might start saving more.

Flip past the headlines to the personal finance section of your paper and you’ll find columnists regularly sounding the opposite alarm: Americans aren’t saving enough!

So, who do we listen to?  The economists who seem to think it’s our duty to spend more for the good of the country?  Or the personal finance writers who say it’s in the best interests of our families to save more?

It’s easy to feel as lost as Neo in “The Matrix Reloaded”: “I just wish I knew what I am supposed to do.”

A Simple, Radical Idea

A long time, I remember thinking that we would all be a lot better off if we would simplybuild a strong base of savings and then buy what we need and want out of that.

It’s such a simple idea.

Save for a vacation and then take a vacation that we pay for out of savings.  Save for a car and then buy a car with cash.

So simple, and yet so rarely practiced.

Instead, we’ve bought into the lie that we are consumers, and consumers can’t be inconvenienced by waiting.  Consumers need to Buy Now!  Delayed gratification?Too much work.  Besides, you only go around once, you know?  Better grab for all you can right now.  And look!  As luck would have it, it’s all on sale.  We can get the computer, the car, the cruise of a lifetime – all for no money down and no interest payments until…

The Opportunity of Today’s Recession

Back when I first had my quaint little idea about saving and then spending, the economy was very strong.  I remember thinking that if everyone suddenly started saving more, the fears of front-page economists would, in fact, come true.  We’d go into a recession.  There would be some pain, but it had the potential to be short-term pain that brings about long-term gain.

Once people had a healthy savings account and were in the habit of regularly saving a sizable chunk of their pay, they could use a portion of that savings to buy the things they had been putting off.

We’d go back to buying stuff again, but we’d do it differently.  We’d go from wanting something, getting it, and then paying for it over the next several years along with a bunch of interest to wanting something, saving for it while earning interest, and then getting it.

Our household finances would be much stronger, and I’m guessing that our country’s finances would be stronger as well.

That’s the opportunity we have right now.  We’re in a recession.  We’re in pain.  Whether it becomes short-term pain that leads to long-term gain depends on what we do next.

Will We Learn From This Recession?

Unfortunately, there are lots of warning signs that we’re headed back to our spendthrift ways.

According to US News, “Consumers are racking up debt againat an alarming rate.”