The sheer quantities of fatherly lectures I’ve had to endure over the years have left my dad’s insightful words of wisdom sounding like an endless drone. But when it comes to money, I’ve got to hand it to him: the guy knows his stuff. The other day when he told me “this is a great time to buy!” I looked at him like he had a pair of Jimmy Choos dangling from his ears. And then, after deciphering his confusing accountant lingo, I realized he has a pretty good point:
“With the current rate of inflation at 5.5 percent and the average savings rate of about 1.5 percent, you’re actually losing money by putting it in a savings account. Inflation means that the cost of goods and services cost more than in the past. So, with a spread of 4 percent (inflation over savings rate), people are much better off spending their money today, because the cost of goods and services will be more expensive in the future.
“Additionally, by people opening up their wallets and spending now, it does a great deal for our economy… which is what it needs right now. You can imagine what sales we are going to see during the upcoming Christmas shopping season — so there’s a double benefit by shopping now.”
Boy, I really never thought there’d be a time when my dad was convincing me to go shopping…