Spend, spend, spend

Broadback

What is the point of saving? My wife and I have taught our children to keep within their income, and put a little by for the future. What poor advice that has been. Here are the thrifty subsiding the spend thrifts. Why should you save when interest rates are less (especially after tax) than inflation? Reducing interest rates means us savers are subsidising those in debt. :mad: I'm off down the shops next week, before the £ devalues my savings out of sight. The socially concious may say that will not help the country, but what the heck, the soshe will look after me, as it does all those who spend their income on booze, bingo and fags.

treecity

The hassles of having money are better than those when you don't have any. IMO

Know how you feel though!

Innys

Broadback wrote: »

What is the point of saving? My wife and I have taught our children to keep within their income, and put a little by for the future. What poor advice that has been. Here are the thrifty subsiding the spend thrifts. Why should you save when interest rates are less (especially after tax) than inflation? Reducing interest rates means us savers are subsidising those in debt. :mad: I'm off down the shops next week, before the £ devalues my savings out of sight. The socially concious may say that will not help the country, but what the heck, the soshe will look after me, as it does all those who spend their income on booze, bingo and fags.

I can relate to what you're saying, but "doing the right thing" means a lot to most people - other than the scrounging scumbags, of course...

granville_2

I feel your pain - this country is based on debt - a sad state of affairs. :mad:

IMO low interest rates encourage people to take on too much debt.

I've recently started putting cash into NS&I Index Linked Savings Certificates (http://www.nsandi.com/products/ilsc/index.jsp).

Good luck.

niceguyed

Broadback wrote: »

What is the point of saving? My wife and I have taught our children to keep within their income, and put a little by for the future. What poor advice that has been. Here are the thrifty subsiding the spend thrifts. Why should you save when interest rates are less (especially after tax) than inflation? Reducing interest rates means us savers are subsidising those in debt. :mad: I'm off down the shops next week, before the £ devalues my savings out of sight. The socially concious may say that will not help the country, but what the heck, the soshe will look after me, as it does all those who spend their income on booze, bingo and fags.

No I think you have taught them the right values which will hold your children in good stead. BOE base rate may be low and inflation currently high but you will find Banks are keen to attract savers to recapitalise and so are still offering decent rates. Inflation should also come down as people have less money to spend.

MrMicawber_2

Yup - keep teaching your children the good old values. Here's a little example of steady saving and compound interest. If your ancestors (and we've all got them). Put £1 per year into a savings account paying 5% (after tax) at the start of each year and began at the start of 1AD what do you thing would be in your account today?
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£74,187,686,346,115,300,000,000,000,000,000,000,000,000,000.00

amcluesent

I'm purchasing quite a lot of items at the moment. Why not, when money in the bank is losing purchasing power? You can negotiate a good deal with the shop-keepers as the goods on the shelves now were imported before the £ collapsed, so there's some margin left. That won't be the same for the next container from China.

Another cut in interest rates and I'll be remortgaging - makes complete sense to when the debt is being eroded by inflation due the rate inversion.

swiss69

A top economist was on the radio the other day and he said that people should always have enough money to cover 3 months income, Should save for their pension and keep debts to a manageable level. Other than that he basically said that any more money should be spent to ensure a thriving economy! So he would agree with what you are saying!!

The recent interest rate cut will only help the economy if people who have an extra £50 or so in their pocket spend it!!

The only way we will get out of this recession is if people carry on spending. Signs are not good though with most companys seeing a downturn in sales.

Personally I cant see the point of having thousands of pounds when you are retired and dont need additional income. If your income in retirement is enough then why oard loads of cash? You might as well either spend it or give it to your children whilst you are still alive.

justaquickie

I was thinking along very similar lines earlier today. Then I thought: the knee-jerk reaction to spend is probably one of the outcomes the rate cut is intended to precipitate. Excepting those who live off their savings interest - and they have my sympathy - for the rest of us it's the differential between taxed interest and inflation that is the important metric. I believe inflation will fall to almost 0 fairly quickly if people continue not to spend, leaving the differential pretty much intact. Good old supply and demand. So, I think all us prudent savers should refrain from spending, in our own interests... after I get back from the pub, of course.

neil324

Well im going one better, not working have'nt worked all year im a bricklayer, no need for them anymore. Have been to prudent in the good times and saved to much so can't claim benifits.Lucky i seen this coming and have fixed my money. I like going to Thailand and as you know the pound has tanked. My thoughts are maybe to cancel, but wait a mintue, stay in the UK and spend my money helping crash gordon and his ponzi ideas, NEVER im going to spend my money in Thailand helping the Thai's.

baby_boomer

The current situation [high inflation / low interest rates] is a little lopsided and likely to be temporary.

It is likely that inflation will fall.

It is not impossible that we might experience deflation.

Keep the faith.