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NYT to Consumers: You're Spending Too Much

Shoppers in crosswalk
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Shoppers in crosswalk

The oh-so-trendy NGDP movement is absolutely positive the Federal Reserve can increase spending by announcing that it will target nominal growth.

They’ve even got confusing charts that prove it.

But I’m not confident announcing new monetary policy that 99 percent of Americans will not understand is really going to drive more spending. It’s entirely possible the public would read new, extraordinary monetary measures as a sign that we’re in a lot of trouble—so they’d better buckle down.

A good insight into the mindset of the overburdened American consumer can be read in the New York Times “Bucks Blog.” This is the online column that gives consumers advice. It’s written by Carl Richards, a certified financial planner in Park City, Utah.

And what is Carl telling the readers of the New York Times?

Spend less. Buy less stuff.

In fact, Carl wants to start a “stop buying crap” movement he’s calling Occupy Your Checkbook.

Perhaps it’s time to talk openly about past mistakes we’ve made. Time to take responsibility for our own financial situations and make a plan to improve it. Time to stop buying crap and hoping it makes us happy. Time to stop pretending to be something we aren’t financially.

Time to stop trying to keep up with the Joneses, since we all know they’re buried in credit-card debt anyway.

Occupy Wall Street may or may not lead to change. But I know for a fact that if you Occupy Your Checkbook there will be.

Too often I hear people blaming a third party for their financial problems. In some instances (like fraud, theft or medical emergency), we don’t have control. But in many cases, the only person at fault is the one we see in the mirror.

The credit card companies didn’t make you buy that big-screen television. The banks didn’t make you take out a $500,000 mortgage.

When it comes to our discretionary financial decisions, we hold full responsibility. How long can we keep pretending that these choices fall on someone else?

So tackle the things that you can control. Figure out exactly how much debt you owe. Work through your budget and understand where your money goes. Ask hard questions about your needs and your wants.

Again, I know these seem like small things in comparison to the other stuff. But be honest with yourself. What’s more likely to have an immediate and direct impact on your life, Occupying Wall Street or Occupying Your Checkbook?

Do you really think this kind of ideology is going to be overcome by having Ben Bernanke start talking about nominal gross domestic product?

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