I have been researching the state of real estate, for this blog, and to squelch my ignorance on the subject. There are so many differing opinions. One day I'm sure that the dire situation of our nation is directly because Silas and Tyson stopped paying our mortgage (your house is worth less because mine is being short-sale-d, the lender won't talk to you cause I'm on hold on the other line, I don't have a hardship, the stock market is down because I have a toxic loan with Citi). Then the next day I'll read something strictly the opposite! Let me explain the latter.
Consumer spending is up. Consumer spending is the driving force of our economy. This is seemingly positive news. You can read that article here. Unemployment is up, savings is at an all-time low, consumer debt is at an all-time high, millions of home owners are in foreclosure, and millions more are delinquent on the mortgage or underwater. Why are more people buying more stuff, if things are getting worse? The claim is that freed-up cash from delinquent mortgage payments are making their way to the cash register.
Consumer spending is a HUGE part of our economy. It actually hurts my head to think that upwards of 72% of our economy is used on buying stuff. Consumer spending is the discretionary money people used on discretionary things. They are: clothing, electronics, recreation, household goods, alcohol. I'll bet you have already figured that we spend the most of any country. This is a chart to see how we rate compared to others. Most people in the world have to spend most of the money they earn on housing, food, and health care. We are fortunate to have the luxury of so much extra. We have made our luxury a driving force for our system of stability. I digress, on to how helpful I really am....
I really like being a helpful and useful person. It is satisfying, and who I am. At the same time, I'll admit I don't buy much stuff. I'm super frugal. Even if I have money, I don't want to spend it, or don't want the stuff you can get with money. I am sure I don't spend 72% of our budget on consumer goods (positive, actually). I'll admit it might even be a problem for me. Sometimes I don't buy something I need, because I am (I'll just say it) cheap. The only exception is if I can spend money on someone else, I'll make an exception for you. Could spending money be useful, or even benevolent?
In the past week I realized that spending money we aren't paying for our mortgage, might free us from 'economy-wrecker-purgatory'.
So far, since we stopped paying our mortgage, I have bought several things. I'm now wondering if I did it because I have some extra money. Did I buy a few extras because I knew it wouldn't impact my budget? I'll list the consumer things I got: 3 new shirts, 1 pair of shorts, pants for my husband, summer sandals for my kids, 4 movie tickets during spring break. I scour for the 75% off stuff (and no, not 75% off at Neiman Marcus) and try to get only what we need (need being relative). Maybe we went out to eat 5 times extra since we stopped paying, but mostly we eat at home. Maybe I got those sandals a month earlier than usual from Ross. Maybe I wouldn't have taken my kids to the 3-D movie.
I guess all I have to say is:
Your Welcome
P.S. Please know that this is in jest. I understand that so many are really suffering from the demise of our economy, real people with children, and bills. I think it is despicable that spending cash on expendables could bolster economic indicators and make us feels as if we are all 'okay'. I still see so many out of work, and living on credit cards, and losing their house. The irony of this is that we feel we are collectively helping, by buying an MP3 player and an extra six pack.
