Ever do any analysis on where your money goes Turt? Can be pretty eye opening. I would load my bank statements up to my accounting software and keep very close track, it never fails to amaze me how much the cost of some things has changed through the years. Food has especially increased in price, in all fairness though I have become very particular with what I eat. And if you have kids these days, my goodness what it costs, school alone almost makes me need a second job. the real rewards are peace of mind, I have always felt you need to have a certain degree of surplus available in case things get real bad. It is true you do not make a fortune from a savings, you should not expect to, thats what investments are for. But should you ever find yourself in need of a serious fast cash injection you would get why savings matter. I learned the hard way few years back when some dolt slammed into the side of my car. Sure we carry insurance and all sorts of other stuff for cases like that, but guess what that money is not instantaneous. The tow truck guy wants his money then, the emergency room wants their co-pay then... and the list goes on. I think I read in another thread three months savings? Good amount to start with I guess.
I tend to agree that with convenience comes a bit of laziness. Or at least, people aren't being more conscious about their money habits. At the same time, you could also say that the electronic age is throwing up more risk in terms of security. Before you would be worried that someone would pick the wallet out of your bag. Now it can be a lot easier than that...
It does make spending easier but that is not an excuse. You can't blame technology for a problem that is caused by the lack of attention by people.
You almost never hear about people saving money anymore. The discussions are always about what they want to buy, and saving up money for a specific purchase. I am really trying to teach my kids the value of saving their money, and not purchasing things that the do not need because I do not want them to wind up broke when they get older. It is really hard to save money. We are trying to do away with electronic paying as much as possible. We still use it to pay bills, since you can do that online or over the phone, but other than that, we want to use cash more.
People have always been the same, at least since WW2. It used to be houses and cars, then it was TVs and stereos, now it is ******s and tablets. The USA economy is based on consumerism.... we became the most powerful country because we spent everything we had on stuff, and that stuff created jobs. I actually think things were worse in this regard from like 1995-2003 because during those years, it was sooo easy to get credit cards or a second mortgage on your house. When I was in college, I was getting pre-approved credit card offers left and right.
Credit's been around for decades, though. I'd say it's a mixture of all factors, including credit, debit cards, predatory-esque banks, and so much more. People have always had problems saving their money, but too many people believe that they need to spend money in order to be entertained or whatever. It's just a continuation of bad habits that have always been there, and you can blame a lot of parents and educators for not teaching younger individuals the importance of personal finances and managing money.
It's true that credit card helps a bit when you don't have actual cash, but it's also true that when you do not have much discipline, you can end up burning all of your savings because of all your expenses that were not well-thought of. I would still go for the old habit of making sure you already have the available funds before making any purchase. This ensures that you are not literally spending your income in advance.
I am sure there are quite a few people around that can attest that they tried to do everything right and still ended up in a bad way. Sometimes it is the unexpected things that you cannot control that can wipe out years of hard work and perfect planning. Ask anyone that lost a portion of their retirement savings when the market when nuts back in 2008. One of the things that never fails to make me worry is if there is an unforeseen illness or a sudden accident, it is almost impossible to figure out that expense. There is a friend of mine whose wife went in for a routine surgery that went bad. He told me even with negotiating down the medical costs that were not covered they still had debt of over $300K. That's scary how on earth do you plan that much less actually pay that much when your older? Thank God he still has his wife, but the price is steep, they lost their retirment savings and now they are going to claim bankruptcy.
Human beings have an outdated brain. When they hold money or coins in their hands and then spend, they can subconsciously grasp the spending process. When they stick physical money into the bank, they again can see the saving process. When people spend electronically they do not feel they are spending money. This is one of the major reasons Casinos use chips instead of cash.
Yes, to answer your question. My fear is that this is just the beginning. Don't worry about savings. People have no reason to save with these low interest rates. We haven't seen anything yet. We are probably less than a decade removed from a truly cashless society. I don't know about you, but I find that to be a frightening prospect for several reasons.