Saving My $600

Here's a really scary article/interview on Newsweek with the author of "Going Broke: Why Americans Can't Hold on to Their Money."

The average household owes 20 percent more than it makes each year. The personal savings rate is in negative territory. Record numbers of Americans are losing their homes to foreclosure, and millions more are struggling to keep up with their monthly bills and obligations. And the nation's economy isn't in much better shape.

...If you have a consumer society where no one is saving—where no one is encouraged to save—and millions are in debt [and then] you hit them with a jolt to their income, they're instantly going to be in trouble.

The House and Senate have passed economic stimulus packages that include rebates to taxpayers, which the government is encouraging them to spend. That seems like an irresponsible message for taxpayers who have debt or no savings.

A number of financial advisers would certainly agree that it would be much wiser to save the rebate to protect against a future [emergency] or to pay down debt—neither of which is going to do what the stimulus package is designed to do. Individual consumers are basically being asked to do something that is probably not prudent for themselves for the sake of the larger "economy."