America Should Go Back to Its Thrifty Roots

photo credit: jswieringa

Americans are notorious for their conspicuous consumption, living beyond their means by mortgaging many unaffordable purchases on credit cards. The debt problem has gotten so bad that credit card companies feel guilty, offering debt-managment websites and tools.

Gone are the days where being frugal is considered a virtue; even the Joneses struggle to keep up with their neighbors today. In fact, personal savings rates, which averaged more than 10% in 1980, have fallen to almost zero. Borrowers are over-extended, even the country borrows from foreign sources. Clearly, the time has come for America to return to its thrifty roots.

Americans need to save for retirement, rainy day funds, and one-off emergencies, like health services. The government, already overextended, does spend some money to encourage saving, forfeiting more than $100 million yearly in forgone taxes, in order to fund IRAs and 401(k)s. But some financial experts say that the government should make saving even easier, offering easily-purchased U.S. savings bonds.

Clearly, no matter what the government does or does not do, the American public needs to save more efficiently. No more lottery tickets, less credit spending, and more frugal living will go a long way toward this goal, but it’s up to each person motivate himself.