I know a balance is needed. But it’s always stressed how you need to save. Isn’t saving taking away from someone else though? Isn’t spending in many cases giving a working class person a job? If you eat out, buy clothes, get a massage even go to a casino, people are getting paid to do those jobs. If everyone saved then what?
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I don’t think everyone can completely save everything they make. The balance you’re referring to is each individuals tolerance for disposable income.
That’s why consumer confidence is a huge part of economic health. If everyone feels insecure about the future, they spend less which hurts the service industry. Which hurts the economy even more, making more people financially insecure.
But you shouldn’t burn your house down to keep someone else warm. Saving for personal purchases and retirement is important and you shouldn’t spend more than you can afford because of some economic theory.
If you save and invest you will get a more consistent money stream eventually allowing you to live better yourself and also potentially donate to more people below you… Saving doesn’t mean not using the money. Ideally it means making the money work for you in investing.. or high interest savings… Ofc a fair bit should be saved for emergencies.
Thus you ultimately move about more money and that in turn is actually good for the economy and actually for people because an economy where money is actively spent is generally a good thing
In the casinos case. The house generally always wins and lines their pockets, the people working there usually have a fixed salary anyway
Saving is usually stressed because there are a lot of people who don’t have much in savings and many of them are in debt. Savings isn’t stressed as much for those who are already well off unless it’s aimed at younger people to get them to develop a habit of saving.
If you only save and don’t spend, will you enjoy your life and your savings / wealth? If you only spend and don’t save, will you have enough for a rainy day or for when your income stops but your spending doesn’t? It depends on each person’s individual situation.
If a lot of people save, that saved money will end up in banks and those banks will then lend out that money to people and businesses to spend and invest which in turn can also create jobs.
Saving is usually stressed because there are a lot of people who don’t have much in savings and many of them are in debt. Savings isn’t stressed as much for those who are already well off unless it’s aimed at younger people to get them to develop a habit of saving.
If you only save and don’t spend, will you enjoy your life and your savings / wealth? If you only spend and don’t save, will you have enough for a rainy day or for when your income stops but your spending doesn’t? It depends on each person’s individual situation.
If a lot of people save, that saved money will end up in banks and those banks will then lend out that money to people and businesses to spend and invest which in turn can also create jobs.
Saving money instead of spending or investing tends to inhibit the economy, but so does spending so recklessly that you are left unprepared for bad situations.
When you lose your house and subsequently job because you couldn’t afford repairs, the economy suffers more than it does if you sit on your money.
You can also save two ways. You can either invest, potentially growing the economy, or sit on your money in a liquid state. Investing grows the economy in a less direct way, encouraging growth instead of directly going into the pockets of workers.
In terms of benefitting the local community yes, spending localy is always better. Specifically when you’re spending money on local businesses and industry. The way you create a thriving local economy is by having more money flowing in than money flowing out. So businesses like walmart will have more money flowing out of the community than in, whereas smaller businesses will have more of that money staying in the community. That’s the problem with globalism. It extracts wealth from local communities and consolidates it elsewhere, which reduces the community’s buying power as a whole.
So it isn’t so much about how much about how much money you do or don’t save, its about where you spend that money. Local is always better, even if its more expensive.
Generally when you “save money” unless your putting in gold bars in the swamp, its generally either going to a bank, government bonds, or stock. So when you put your money in a bank, a portion of that money is being lent out for other people to use. Either a mortgage or a house etc. When you buy a government bond, you giving money that can be used for wellfare, government projects ect. Stock is the only one which doesn’t really help people, but even then you can buy stocks from a company and it will generate a cash inflow for them that can be used to hire people and stuff. So when you “save” money your still generally investing into the economy, even if you were to spend it on luxury.
In all honestly I don’t think either consumerism or investment significantly help the working class. If you want to do “moral” good with your money you should donate it to a non-profit you share values with. But personally its your money. You should do with it whatever makes you most happy either long term, short term, altruistic or “selfish”.
The reason why saving is stressed, even though a balance is important, is because most Western capitalist societies are significantly unbalanced on the side of low savings and/or debt, especially as far as retail financial security is concerned.
Saving or investment of money is important for an economy, just like spending. However for individuals, if you are spending too much in a wasteful way (i.e. not contributing to your increased productivity in the future), or not saving enough, you’re setting yourself up for being broke, or being unable to upskill yourself, and therefore a potential burden on society and the economy in the future.
Spending isn’t bad, but a large portion of the population having near-zero or negative networth, while spending on conspicuous consumption is indicative of a problem.
Caveat 1: a lot of the above is necessarily qualitative. It’s impossible for someone to say, what *exactly* would be better for everyone in the long run. Only you can decide if a night in the casino, or an online data science degree, is more important to your productivity given your situation. (not /s)
Caveat 2: the saving-spending imbalance isn’t the only problem, and it’s not just up to poor/ middle class individuals to save more, or spend responsibly, to save capitalist society. But saving more and/ or spending responsibly is critical for individuals when planning out their own financial well-being. Also it can be legitimately hard to spend less if you’re being bombarded by targeted marketing campaigns.
Why stop there? Make a mess at the restaurant, grocery store, etc, so they have to hire more people to clean it up.
Think carefully about that example and you will understand the fallacy in your claim.
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