If we all lived within our means and said no to debt..

what would  happen to our economy? I am trying to but what if we all did it?
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Comments

  • STU - I think there is a big difference between living beyond your means and taking on a planned debt (like a mortgage) that you can cope with. You need to differentiate between secured and unsecured debt as well

    You can sell a house (eventually). You cannot sell a holiday you took in 2009 or a fabulous Christmas......

    I think people should think harder before taking on debt.
  • there are differences Madge agreed   but I think it is interesting to look at what if we all said no to debt and lived within our means. Perhaps we could leave mortgages aside to keep it simpler. Would our economy welcome no personal loans being had and folk living within their means?

    KK - I undertand that position and many of us are in it (we are paying off now and little to spare). The question still stands what if we all said nope to it all? What would happen to our economy (leaving mortgages aside for ease)?

  • Stu :  Why do you feel the need to broadcast your inadequacies across the forum every day ?

    A vast proportion of the population DO live with their means, and as Madge says only take on the debt they can service.

    Just because you seem to struggle doesn;t mean the rest of us do

  • we are managing DTXS (just) -and are the vast majority living within their means? Anyway, question is if we all lived withing our means and said no to debt would it be good for our economy. Is it your inadequacy that detracts you from considering the question?

    many of us think we should return to this sort of attitude and state of affairs

  • What Madge says,

    People should learn to save for what they want like generations before had to do and need to accept that if they can't afford it, they can't have it.

    You don't have to live like a pauper - holiday in Greece not Florida; wear M&S Limited Collection shoes not Manolo Blahniks; have the set menu or 2 courses instead of 3 when you eat out - you can buy a bottle of wine and a dessert at the supermarket on the way home if you really want to; take your own lunch to work... 

    There are literally hundreds of ways to leave more within your means  - and keep the wheels of the economy turning - without being at all deprived.

  • yes screamy (I take the same approach) but is it good for the economy that we do as you suggest and simply say no to debt and live within our means? That is the question.  If we all did it would it not have a negative effect on the economy?

    I believe we should all do it too but that aint the question really.

  • I have considered the question,

    And therefore live within my means,

     I only have a debt that I can service (mortgage).

     I use a credit card to save me carrying cash, which I clear every month, I also get vouchers from it every 1/4.

    I own my car, I have no store cards,  If I need something I buy it, If I want (there is a difference between need and want) I save up for it.

    As we were talking yesterday, responsibility.. I like to think I'm grown up and responsible, and haven't got myself into a mess

  • Of course it would have a negative effect on the economy.  No borrowing = no interest paid on borrowing = no interest to pay on savings just for a start.

    As Madge says, it's about living within your means and that doesn't just mean a cash only society.  It means balancing your incomings and outgoings on a short/medium and longterm basis.

  • kittenkat wrote (see)

    Stu, I think that if the country can't live without debt then the country has done us all a disservice.

     KK - I agree with with you 100% but feel that is what the country is actually doing and the economy demands we get more indebted image If we all said no - what would happen to growth with they all bang on about?

    I will ask again DTXS -what if we did what you did (which is what I aim to be able to do)?

  • I have Coops to sort out my financial stuff, the butler does the rest.
  • TP - if we simply  lived within our means even like madge said would it do the present economy any good? Is that what they really want us to do? If the global economy is f*cked and many are consuming less (to live within' their means), less jobs will come about and an whole industry based on providing loans would dwindle into very little.
  • STU - wrote (see)

     KK - I agree with with you 100% but feel that is what the country is actually doing and the economy demands we get more indebted image

    What nonsense - how does the economy demand that we get more indebted?  I haven't noticed anything demanding we take on any debt at all, unless you are considering the indebtedness of the nation in its national finances, where we are still increasing our national debt.

    If everyone lived within their means and those who didn't weren't servicing debt there would be more disposable income freed up for people to spend as they wished, so the economy wouldn't go belly up!  

    I used to work with the over-indebted and the excuses that they always made were "They offered me the card so I had to take it" or "They put my credit limit up".  So what?  If you can't afford it, don't spend it - simple!  Plenty of us have credit thrown at us from all angles and are able to say no thank you - it's not rocket science!

  • STU - wrote (see)

    yes screamy (I take the same approach) but is it good for the economy that we do as you suggest and simply say no to debt and live within our means? That is the question.  If we all did it would it not have a negative effect on the economy?

    I believe we should all do it too but that aint the question really.


    Surely it's the only way for the economy to remain strong, stable and sustainable long term? I think what everybody, including politicians have to get their heads around is that sharp upward growth cannot be infinite, Boom will always be followed by bust . I am not an economist and I am totally sh*te at maths - but if I can understand that you can't continuously fuel the economy with debt  - that eventually you have to pay for what you "buy" then anyone can. 

    One of the reasons France suffered less than some European countries during the current recession is that economic growth there was always small. Added to which housing debt there is almost non existent because practically everybody rents (it is cheaper). They still have the same long-term issues like longer life expectancy etc. but are better placed to deal with them - and while we are accepting eventual retirement at 68 they are up in arms about retiring at 62!

  • STU - wrote (see)

    I will ask again DTXS -what if we did what you did (which is what I aim to be able to do)?


    And I will answer again !!!

    Living with in my means doesn't mean I have stopped spending, Doesn't mean that someone isn;t employed to manage my credit card, Doesn't mean my bank manager is out of a job (By the way my Bank Manager is called Andy, a real person in a real bank in Crewe)

    I have my car serviced at a main dealer, I had a custom time trial bike built last year, we had 2 foreign holidays... But we saved up (must be someone managing that I suppose) rather than bang it on the plastic.

    The pub in the next village does 2 for 1 on Wednesday evenings, So we often take advantage of that, keeps the pub staff in work and the chef.

    We buy our food carefully at proper shops rather than supermarkets (in fact Sue has just left so she can call at the fish mongers before work).

    See I am generating loads of job opportunities, With out living beyond my means..

    Full enough answer ?

  • Hannabelle - the economy demands consumers doesn't it. It wants to sell more and more of it's goods doesn't it?  If we all lived within our means and demand for goods tailed off  as a result , would the economy accept a state of reduced growth or no growth at all simply because we are living within our means? It just does not work like that. It will prefer folk to go into debt rather than stop buying by it's nature.
  • They need to raise interst rates to encourage savers. What's the point in saving if your money doesn't earn anything.
  • Screamapillar wrote (see)


    Surely it's the only way for the economy to remain strong, stable and sustainable long term? I think what everybody, including politicians have to get their heads around is that sharp upward growth cannot be infinite, Boom will always be followed by bust . I am not an economist and I am totally sh*te at maths - but if I can understand that you can't continuously fuel the economy with debt  - that eventually you have to pay for what you "buy" then anyone can. 

    Screamy I agree totally. Infinite growth on a finite planet just doen't go at all and yes politicians and so called economists need to get their head 'round that rather quickly.

    we are constantly fuelling the economy with debt -it is a Global thing.

  • This is a tricky one and needs more deliberation. Srsly.

    I have worked for a bank and (shock) they are only interested in reaping income from you, me and everybody. In practise this means complicated numbers games - If I take on 100 customers will the revenue I generate fom the god risk ones make me more than the losses I make on the bad ones.

    The banks know fairly precisely how many customers out of each tranche they take on will go bad, but they target them anyway, with sophisticated systems like you wouldn't believe. If you gave me your postcode I could tell you pretty much exactly what your socio-demographic profile is and even what your house "probably" looks like and what the character of you and your neighbours is.

    So, banks milk customers for revenue and employ every trick they can to eke out that extra farthing, whilst all the while trumpeting how much they give YOU and how marvellous their customer service is.

    On top of that its a competitive market and the multiplicity of choice of product is bewildering and you need to shop around very carefully to find good, lasting deals.

    So, you need to be smart and do your research and above all do not over-commit yourself, which can be difficult against all the pressures organisations put people under plus the general expectations of a consumerist society.

    Thats on a personal basis.

    On a national basis you could make an excellent case for saying that the 10 years prior to 2008 saw unparalleled personal prosperity funded largely by the credit bubble. If the credit bubble hadn't occurred, "growth" would have been lower and personal prosperity would have been lower. Since the crunch we have reaped the whirlwind on a national and personal basis.

    So, less credit means slower growth and lower net prosperity. More credit risks bubbles which go on to pop and more boom and bust economcs - take your pick.

    The job of govt is to steer between the two options - some like Canada and Germany have apparently succeeded, others like Ireland, Greece etc have followed the money and are now paying the price.

    ps send me your postcode and I'll tell you all about you and your neighbours image 

  • STU - wrote (see)
    Hannabelle - the economy demands consumers doesn't it. It wants to sell more and more of it's goods doesn't it?  If we all lived within our means and demand for goods tailed off  as a result , would the economy accept a state of reduced growth or no growth at all simply because we are living within our means? It just does not work like that. It will prefer folk to go into debt rather than stop buying by it's nature.

    Well the goal of many retailers is "increased market share" - that assumes the market is actually finite rather than something which can be increased and their aim is to capture more of it from their competitors. It's a slightly different way of looking at things.

  • Stu - I love the way you talk about the economy as a living entity, with thoughts and desires.

    Plenty of us consume plenty of goods without resorting to debt, and as I said above if people weren't in debt and freed up their interest payments each month to spend then they probably would spend them on consumer items, thus there would still be plenty of money being spent.  Thus even without debt there would still be plenty of consumption.

    Surely we have just been through a period of no growth (in fact, negative growth) with the recession and we are coming out of it again into a period of small growth - the economic cycle of recession and periods of growth has happened over and over, all over the globe forever!

    What about the losses made from the overindebted defaulting on debt?  This is a factor taken into consideration in all lending institutions, so debt itself isn't seen as a great thing by "the economy".

  • Yes Screamy -   thing is that by its nature our economy will fuck itself up anyway.  It is the big banks and corporations activity that is crippling the world. We ordinary folk are asked to pay for their mistakes yet the economy demands consumers. It is full of contradictions and flaws. The obsession with growth  shows how blind these folk are to reality and true economicsimage
  • STU - wrote (see)
    Yes Screamy -   thing is that by its nature our economy will fuck itself up anyway.  It is the big banks and corporations activity that is crippling the world. We ordinary folk are asked to pay for their mistakes yet the economy demands consumers. It is full of contradictions and flaws. The obsession with growth  shows how blind these folk are to reality and true economicsimage
    Well I certainly wouldn't disagree with most of that Stu.
  • A few years ago I decided that I wanted a Nikon D3. I could have bought it, but I decided to get a terramundi pot, started making my own lunch and put the £4 a day I'd spend in the pot.

    A year or so later I bought a D700 - there's not enough difference between the D700 and the D3 to warrant the £1,200 difference. That was the first time I'd saved for anything in ages. If I wanted something, I bought it.

    You can't take money with you, so if you've got it, spend it. If you haven't got it, Wonga.com or Borrow.com are most certainly not for you.


    Johnny BlazeGL52 2BE. Demographise me!
  • Took you to page 2 to mention big banks & corporations that are crippling the world......

    You really are starting to believe the crap you are watching on the internet aren't you ?

    Must be really tough waking up every morning, Knowing that your little world is going to be full of crap again, and that we are all condemned ...

    every thought of waking up and thinking what a great day I am alive, I could go for a run, I could go to work and be creative ?

    I'm not ossesed with growth (well apart from my waistline) btw

  • Hannabelle those running the economy do have thoughts and ideas .  Without society we do not have an economy. The economy acts and evolves in particular ways related to the social structure. It "functions" . The ideas driving the present economy do not sit well with the needs of people and the planet. It will change either because too many folk will suffer and seek change or we act and change it's nature before too much damage will occur. Besides it is not unusual to treat an institution as a living functioning body and society in general.
  • DTXS - I read allsorts on the net good and bad. Thing is I think and try to make informed decisions alway up for further scrutiny. You on the other hand open your head and let the status quo tip what it wants you to believe inside your head before closing it and your mind again. I know what i would sooner do-lol
  • Be miserable all the time !!!
  • ps I have never called anyone a Nazi because they didn't subscribe to my view
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