Tampa, FL – Consumer confidence appears to be very high if the latest consumer spending figures are anything to go by. The recent change in tax laws may also be a factor that ensures that growth continues and perhaps even speeds up. Consumer spending was up 3.8%, with big-ticket items particularly popular.
Companies such as Air National HVAC have reported positive sales figures as consumers have looked to upgrade their HVAC systems and other expensive products for the home. Unfortunately, the rise in consumer spending has also been matched by a decline in customer saving. American savings are now at a 12 year low.
Although useful for headlines, and an essential factor in the economy, increased spending and a decrease in savings could potentially be storing up problems for the economy in the future. As debt ratios increase, when interest rates inevitably rise there is significant potential for economic fragility and crashes.
Leading financial experts such as Dave Ramsey are always warning about the risks of debt, and there is an ever-increasing number of websites dedicated to helping people lower their expenditure to be less exposed to financial volatility. Common Sense With Money and Everybody loves your money are two examples of these type of sites.
The critical thing to remember is that there is always a risk with any credit, which many people fail to factor into their equation. Even interest-free credit still creates a monthly payment, which needs to be paid regardless of whether or not the borrower loses their job. The best advice published on all of the various money sites is to do everything in moderation, save, spend and invest, or as your grandmother might say, “Don’t put all of your eggs in the one basket.”