Today’s article is “Dueling Pig Ads Urge People to Save, Spend“
Brief summary: An ad agency in Finland has started running an “evil piggybank” ad encouraging people to spend money, while here in the U.S. we have the “feed the pig” commercials encouraging people to save money.
This article is interesting because it brings up a good point…should I save my money in a down economy, or go spend some to help the economy recover? Well, I say save what you can. Here’s why…
The Finns are trying to stimulate their economy by having their citizens spend all they can, but that is part of what got us Americans in trouble in the first place. We didn’t save, we just saw what we wanted (instant gratification) and bought it, usually on credit. This is proven by the fact that 2 years ago Americans were spending 2% more than they were earning…that’s right, we were saving NEGATIVE 2% of our incomes…awesome, huh? That figure has jumped to POSITIVE 2.5%, but that still isn’t enough.
I love that the feedthepig.org organization is trying to encourage people to save…I think it is exactly what we need to be doing right now, and so does the expert from the article, Kent Smetters. Smetters says we should be saving about 10% of our incomes, and Jerrill and I agree with that percentage, as long as the person has the added protection of an emergency fund of at least 3 months expenses ($1000 emergency fund to get started).
So, you might be asking yourself why in a time of economic downturn do we think you should be saving money? Well, we figure it’s covered. Think about it…you still buy your groceries, pay your electric bill and mortgage payment (hopefully), so the only thing you’ve cut back on are the $6 coffee and designer handbags. Well, the truth of the matter is that if you had to put those items on credit or had to cut back on them first, you probably couldn’t afford them anyway. But that’s OK, not everyone can afford those things. That is the way of the capitalist system…it only guarantees you the opportunity to earn enough to have the finest things, it doesn’t guarantee you the finest things. and don’t worry that no one is out there buying things and stimulating parts of the economy other than groceries and electric bills. There will always be people who can afford to have finer things, and they will by these things even when there are economic woes.
So, save your money. Pay attention to what we say and those Feed the Pig commercials. Don’t pay any attention to the Finnish commercials…we tried over-spending already, and look where it got us!
