Can You Spend and Save?

I used to be a die-hard bargain shopper. I once spent a month going back to one store waiting for a $200 sweater to go on sale. A few times a week during that month I would use my lunch break to go to the store to check on the price of the sweater. I even hid the sweater (in my size and color) on another rack hoping no one would buy it before the price dropped to the range I wanted to pay. Eventually the sweater went on sale for 80 percent off. I was so proud of that bargain. I told myself I had saved $160.

But I really hadn't saved any money. I spent $40, plus tax. The fact is you never save when you spend.

It's a lesson our government needs to learn. As the debate continues to rage about what if any rebate U.S. taxpayers should get to stimulate the economy, I can't help thinking about that sweater. I wasted a lot of energy with the mistaken notion that was I was saving money.

President Bush and the powers that be hope that by giving money to consumers their spending will save the economy. That's just not going to happen says Steven E. Landsburg, an economics professor at the University of Rochester.

"The idea behind the stimulus deal is to give people tax cuts so they'll feel richer and spend more," Landsburg wrote in an op-ed piece in the Post this past Sunday. "But government can't make people richer on average; all it can do is shuffle wealth around."

Take a look at Landsburg's piece "Why the Stimulus Shouldn't Stimulate You" (Jan. 27) to find out why he says the stimulus package in Congress is poorly conceived, unlikely to work, and sure to do more damage.

Not even some of the people who would get a cash rebate think it will help, Style reporter DeNeen L. Brown finds when she hits the streets and malls. Read what regular folk think about the proposed stimulus package in "Spend, Spend, Spend That Rebate? John Q. Public Just Isn't Buying It" (Jan. 30).

Chat Today
Join me today for a live discussion with authors Jeanne Fleming and Leonard Schwarz. Their book, "Isn't It Their Turn to Pick Up the Check?" (Free Press, $21) was this month's Color of Money Book Club selection. The chat starts at Noon ET, so join us then (or read the transcript later) as we talk about family, friends and money.

Love or Money

The following question would fit right in with today's chat on dealing with relationships and money:

Q: I loaned my sister three $3,200 about seven and a half years ago. I wrote her a letter asking her to examine her conscience and that's when she gave me back $2,000. I have written her several letters through the Internet and she refuses to reply back. She is my sister and I do not want to take her to court. Can you give me a little advice as to what I should do?

A: Consider yourself lucky to have collected the $2,000. Consider the remaining $1,200 a gift. If you love your sister more than the money, stop asking for the cash back. Move on.