THE WALL STREET JOURNAL reported on January 16th that December retail sales increased a seasonally adjusted 0.3% from a month earlier. The Article goes on to quote Joseph Brusuelas, chief economist at RSM US LLP, indicating, “The consumer’s in solid shape,” and “a good description of this report would be fading momentum.” Isn’t it nice to know that it is you and I, the American consumer, who determine the fate of our economy – depending on how much we spend?
My answer (to my question) is no. It’s not nice and the reason is – spending by Consumers is typically accompanied by an increase in Consumer Debt (because the spending occurs on credit) and while that may be good for America’s measure of growth in the economy – it is not good for the Consumer. It would be different if spending increased because Consumer disposable income increased, and a portion of the increased income was spent on the economy – and the rest saved for retirement – that would be a Win/Win. Spending, however, that is an increase from the prior period accompanied by an increase in debt – is a Win/Loss. I only wish a few commentators would mention this when they tout the news on growth. As a matter of course – they don’t – and the reason is that they don’t care about us – the Consumer – they care about the “economy.”
So my question is – are you one of many who spent too much on credit over the holidays – or who have been doing precisely that for a sustained period of time – leaving you with minimum payments on your credit card debt that you can barely manage? If so – like it or not – you are in trouble. Paying minimum payments is not acceptable – because it means you are in the credit card trap and as long as you continue – you are wasting money in the form of paying big interest – and not saving any money. That interest you are paying should be going in your bank to savings – not to Visa and Mastercard. Worse yet, if you can’t manage the minimum payments – the problem is even graver because you are either going further in debt via cash advances – or if those are not available – you are missing payments and the phone calls seeking payment have become your worst enemy. In both of these scenarios – the solution is the same – you need to get rid of the debt – and you need to do it now. The sooner you eliminate the debt (at the least cost) the faster you begin to save for retirement.
“But what about my credit score?” Your credit score is the least of your concerns. Don’t be fooled by the credit industry – they want you to believe your credit score is more important than your grade point, your retirement account – even your grandchildren! Credit scores recover fast – not like the Lions, Tigers, Pistons, and Red Wings. The credit score – which is only needed when you want to borrow (which you should resist) recovers in about a year after you eliminate the debt. Eliminating the Debt is what is important!
It is time you stop helping the economy by going deeper in debt – and time you help yourself and your family – by eliminating the debt. To learn how, you should sign up for our FREE SEMINAR that happens tomorrow, Wednesday, January 22nd – “Debt Be Gone!” Also, if you have a tax problem, we have a special segment on the right way to solve a tax problem! Details are below.
Have a great week,
P.S. Did you know that THAV GROSS offers free consultations for business, financial, and tax problems? Call us anytime – (248) 645 – 1700 or CLICK HERE to send us a message.