Stop Borrowing, Stop Spending

The Federal Reserve is doing everything it can to get banks lending again. This may be fine for businesses that use revolving credit for payroll, or need loans for capital purchases. But it is NOT file for individual workers and citizens. We as individuals need to dial back our borrowing and spending. That is what we champion in our books and seminar. That is also the view of Jeremy Grantham, who manages an $85 Billion money fund. In the June issue of Smart Money magazine, he advised:

"If the problem is that we consume too much, does it make sense to borrow more and spend more? It does not make sense to solve alcoholism by giving and alcoholic a quart of whiskey, but everyone believes that we must stimulate."

Control your spending. Continue to work on your saving. And do not get swept up in the excitement when people start buying everything under the sun ... again.