Wednesday, October 15, 2008

Optimistic consumption

Professor Ronald T. Wilcox from my undergraduate institution explained to me today (via my alumni magazine) why Americans suck at saving money. Turns out we're optimistic to a fault!
"Americans have saved less than most developed nations for a long time, even pre-World War II. It's not like we've ever been a nation of savers. There are famous examples of people who are prominent in American history—Thomas Jefferson being one—who were always in debt. We are a country of optimists. When you're optimistic you tend not to save because you think tomorrow is going to be better than today."

Maybe we're naive or maybe we're just brilliantly manipulating the rest of the world to underwrite our lavish lifestyles.

One tip I recently stumbled upon to curb my own consumption is (hat tip: Rebecca Marie). It's this uber simple, attractive website that helps you consolidate all of your finances - checking, savings, investments, loans, etc. My bank offered the same thing online, but with a lot less functionality. is definitely worth checking out. Warning: initially this thing is a timesuck to set up, but I have a feeling the time investment will pay dividends when it emails me that my account balance is low or when my checks clear.

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