Kara McGuire writes about all things related to personal finance. Follow our coupon clipping, retirement saving, bargain hunting, budget mama as she saves, spends and searches for ways to keep more money in her wallet – and yours.

Fifteen years of no income growth yet Missoni madness prevails

Posted by: Kara McGuire under Financial psychology, Saving money, Shopping Updated: September 14, 2011 - 10:58 AM

I couldn't help but reflect upon consumerism and the economy when reading the Star Tribune today.

Anchoring the front page is a story about how the recession wiped out more than a decade's worth of earnings gains in the state.

More than half a million Minnesotans now live in poverty. We're talking $11,344 for a single person and just double that for a family of four.

One woman picking up food at the Friends in Need Food Shelf in St. Paul Park said her family made $150,000 last year. Now she can't afford food.

At one of the three Target stores less than five miles from the food shelf, Minnesotans afflicted with Missoni madness were clearing the shelves of zig-zaggy knitwear and plastic tumblers. In her story on the launch of Target's latest designer collaboration, staff writer Jennifer Bjorhus interviewed marketing experts who discussed how consumers have "frugality fatigue" and a pent up desire to spend money.

I feel it myself, and notice that like a failed dieter, I have bursts of spending where I put blinders on the budget and spend a bundle. Maybe that's what pushed shoppers to treat this fashion launch as an all-you-can-eat buffet. It felt good to be part of the hype, and forget the negative news for a while.

But when you read a story about how incomes haven't grown in 15 years, and families who once made six figures are now hitting food shelves, it makes you wonder how we can shift from a society of consumers to a society with a pent up desire to save money, or at least be smarter stewards of how we spend it.

Sure, the savings rate is 5 percent - higher than it was during the housing boom when rates hovered near zero. Many families aren't in poverty, have shored up their balance sheets, saved a nice cushion, and can afford to spend money on a cheap chic sweater or two. But for those who can't weather the storms, ignore the whispering in your ear about how consumers need to spend to save the economy. And save yourself first.

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