This from the Associated Press:

The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.

The implications of this are astounding.  We’re heading towards a massive number of baby boomers who will soon be retiring, but are not saving for the future.  A ridiculous number of people are buying houses with no down payment and/or buying houses that are beyond what they can afford.  People are buying more cars than they have drivers and more televisions than they have toilets.

Speaking from personal experience – I spent the first decade after graduating from university saddled by personal debt that increased for a lot longer than it should have before I finally learned my lesson – a person sleeps a lot better at night not having the nagging worry about debt or financial obligations that are beyond their ability to meet.

Where is the point where we wake up and realize that all of this consumption – especially consumption beyond our means – will not bring us any happiness or fulfillment?  Any satisfaction we feel at the purchase of a new toy, gadget, car or plasma screen TV is hollow and temporary, quickly giving way to yet another desire.

I hope more people open their eyes soon, close their pocketbooks, and learn to live within their means. 

“But what will we do without the extra car, tv, cusinart, etc?” we say.

How about taking a walk, reading a book, going to the library, visiting a retirement home and spending some time with someone who doesn’t have any family or loved ones, preparing food at a local homeless shelter, or tutoring disadvantaged children? 

How about saving your money for the future and investing your time in the present?