St. Louis Fed says consumers are "hoarding money."

Posted By: MyBrainHurts

St. Louis Fed says consumers are "hoarding money." - 09/03/14 04:05 PM

The St.Louis Fed explains low inflation is a result of consumers hoarding money. We used to call that "saving" and my parents told me that was a good thing. I'm currently hoarding every dollar I can, so that I can afford to retire someday.

http://www.cnbc.com/id/101963821

"households are sitting on $2.15 trillion in savings—about a 50 percent increase over the past five years."

"So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?" economist Yi Wen and associate Maria A. Arias asked in the St. Louis Fed paper. "The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money."
Posted By: Bankbb1, PITA

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 04:12 PM

I dont suppose they have ever heard of thee term "Consumer Confidence"?
Lack of said term has been known to cause a similar reaction for about the last 3 - 4 thousand years or so.
Posted By: DD Regs

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 04:16 PM



Oh wait, who runs the "Feed the Pig" ads confused

Does advertising actually work.
Posted By: Truffle Royale

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 04:23 PM

Headlines touting the ultimate demise of social security 'for the public's own good' are surely not to blame for money hoarding either. smirk
Posted By: Bankbb1, PITA

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 04:28 PM

People are hoarding ammo and cash.....
and apparently Beanie Babies, cause I never see them anymore either!
Posted By: TMatt87

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 06:25 PM

Are they really trying to blame people for being responsible and saving money?
Posted By: HappyGilmore

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 06:45 PM

they obviously have not looked at the spending patterns or habits of MsGilmore...

i hoard money, i put the max in 401(k) that our bank matches...put extra in Roth...have a savings account MsG knows about, one she doesn't, and also have some ready cash on hand that never sees the inside of a bank

i expect that when i retire i will live solely off my savings and 2 pensions, no expectation of social security, and i'm planning as such...so, if it is there, then great, it will just be extra income for me
Posted By: manimal

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 06:50 PM

::ponders building a vault under the new house::
Posted By: Matt_B

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:10 PM

I plan to live the last 25 years of my life much more excitingly than the first 25, so yes, I'm doing very similar to Happy when it comes to aggressive savings and retirement planning. I don't plan on any outside help, and I don't plan on working until I'm 80 either! I'm going to get out while I can still enjoy life.

My wife, I don't know what she's going to do. I'm not letting her live off my life's savings, that's for sure!
Posted By: DoS

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:13 PM

Originally Posted By: Matt_B
My wife, I don't know what she's going to do. I'm not letting her live off my life's savings, that's for sure!


I told my wife that ... she said she will get half of it one way or another crazy
Posted By: DD Regs

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:17 PM

On our relationship, there is no Her Money My Money, it is all our money.
Posted By: edAudit

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:22 PM

in our relationship there is no money as she spent it all
Posted By: Truffle Royale

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:24 PM

I'm in a marital property state meaning what's mine is mine and what's his is mine. laugh

fwiw, I truly believe one of the secrets to a successful marriage is separate checking accounts. We each contribute the same percentage of our earnings to pay household bills. The rest is each our own to pay individual credit cards, play golf or buy shoes, etc. wink
Posted By: edAudit

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 07:25 PM

"Much of that liquidity, however, has sat fallow. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.15 trillion in savings—about a 50 percent increase over the past five years."

Too Big To Fail Banks Have Paid $251 Billion in Fines For Sins Committed Since 2008

http://www.forbes.com/sites/robertlenzne...ted-since-2008/


Could it be that the banks are required to hold it and pay some to the same government that claims they are hording it?
Posted By: Skittles

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 08:24 PM

Leave Compliance? Can we actually do that?

My husband is just a couple of years from retirement. We're trying to sock it away in our 401(k)s, bought his childhood home and had it renovated - and plan to retire there. Our house will be paid for and I will continue to work - after I find a job - for awhile since I'm quite a bit younger. Hopefully our expenses will be greatly reduced.
Posted By: HappyGilmore

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 08:32 PM

Originally Posted By: Truffle Royale
We each contribute the same percentage of our earnings to pay household bills. The rest is each our own to pay individual credit cards, play golf or buy shoes, etc. wink


oh goodness...since MsGilmore teaches pre-K at a church school, if I had to rely on her contribution to pay bills we'd be living on the street...
Posted By: Matt_B

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 08:38 PM

Originally Posted By: Truffle Royale
I'm in a marital property state meaning what's mine is mine and what's his is mine. laugh

fwiw, I truly believe one of the secrets to a successful marriage is separate checking accounts. We each contribute the same percentage of our earnings to pay household bills. The rest is each our own to pay individual credit cards, play golf or buy shoes, etc. wink


We maintain separate accounts and only commingle funds for household expenses (paying the mortgage basically, the rest of the utilities come out of my income, and she gets the groceries generally). I'm joint on a card with her, but I'm alone on all mine. So I can chip in on her expenses when her teeny tiny paycheck falls short of her big student loan payment, but otherwise it's easier this way. She likes to balance and track every cent, I don't give a carp, so it'd be a huge pain for her to try to track my spending if she had to laugh

Makes establishing a household budget tougher when things aren't aggregated, but meh. I know when she says "tighten the budget" she just means for me to give her more of my income to spend on shoes and purses. smirk
Posted By: Sinatra Fan

Re: St. Louis Fed says consumers are "hoarding money." - 09/03/14 08:50 PM

If the consumer doesn't save money, the government chides them for being profligate (yeah, I know, a little ironic) and relying too much on Social Security.

If the consumer does save money, the government chides them for "hoarding" money (in the government world, there is no such concept as "saving" money, so they have to find another word for "failure to spend"), and not fueling the economy.

The message seems to be: do what the all-knowing and always benevolent government tells you to do, you poor deluded consumer who can't be trusted to make any decisions.
Posted By: Purple Pride

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 12:21 PM

What ^^^^^^ said.

My wife is a stay at home mom so we only have joint accounts. Any money I make is not mine anyway, I am just a steward, so I have no issues with considering it "our" money.
Posted By: Retired DQ

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 12:23 PM

Mine is mine and his is his. We share a small household account, and yes, I am hoarding my money.
Posted By: Sinatra Fan

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 12:36 PM

Originally Posted By: Purple Pride
Any money I make is not mine anyway, I am just a steward, so I have no issues with considering it "our" money.


Amen, brother!
Posted By: Bankster

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 12:58 PM

Whatever works for you is great. But just curious, for the people that say mine is mine and his is his, what happens if one of you loses his/her income? My wife has had two government jobs eliminated in the past four years, through no fault of her own. I can't imagine if we had separate accounts. Would she have to ask me for an allowance? That wouldn't seem right.

And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.
Posted By: RR Becca

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:02 PM

We have 3 accounts - his, mine, and ours. Paychecks go into the joint account and we give ourselves a small allowance for mad money into each individual account after all the bills are paid and a chunk put into savings (yep, we're hoarders, too!). This prevents whining and pouting when he wants a new golf-something and I want something for the ponies. Actually - I pay nearly all the equidae bills out of my mad money...that way he can't use "your horses are too expensive!" in an argument. wink
Posted By: #Just Jay

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:03 PM

We have had everything joint since day one, I could never imagine separate accounts. Admittingly, I'd be too consumed with wanting to know what the other half is doing or has going on!
Posted By: edAudit

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:04 PM

Originally Posted By: GoBucs
Whatever works for you is great. But just curious, for the people that say mine is mine and his is his, what happens if one of you loses his/her income? My wife has had two government jobs eliminated in the past four years, through no fault of her own. I can't imagine if we had separate accounts. Would she have to ask me for an allowance? That wouldn't seem right.

And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.


Bingo including the two jobs thing.
Posted By: RR Becca

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:08 PM

Originally Posted By: GoBucs
And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.


Since the boy arrived the percentage of mad $ being put aside has been greatly reduced. grin
Posted By: Retired DQ

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:16 PM

Originally Posted By: GoBucs
Whatever works for you is great. But just curious, for the people that say mine is mine and his is his, what happens if one of you loses his/her income? My wife has had two government jobs eliminated in the past four years, through no fault of her own. I can't imagine if we had separate accounts. Would she have to ask me for an allowance? That wouldn't seem right.

And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.


In my relationship, I am the only one with a child. I maintain enough cash on hand for 6 mos salary. In the compliance field, unless you really suck, you have great job maneuverability.

We both make approx the same salary.
Posted By: E.E.G.B

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:32 PM

Originally Posted By: RR Becca
We have 3 accounts - his, mine, and ours. Paychecks go into the joint account and we give ourselves a small allowance for mad money into each individual account after all the bills are paid and a chunk put into savings (yep, we're hoarders, too!). This prevents whining and pouting when he wants a new golf-something and I want something for the ponies. Actually - I pay nearly all the equidae bills out of my mad money...that way he can't use "your horses are too expensive!" in an argument. wink


This is how we do it too (although our hobbies are different from RR Becca's. smile )
Posted By: Daisy Doodle

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:40 PM

This is an amusing thread. Every year the networks announce usually gloomy predictions for holiday sales and I wonder who is not doing their part?? Being single makes my financial life easy, but savings come off the top, same percentage as always, money for bills, vacations, and gifts is set aside by budget and whatever is leftover I gleefully SPEND on whatever the heck I want!! Clothes, jewelry, things for the house, outings. I support the economy!
Posted By: Bankster

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 01:58 PM

Originally Posted By: DeeQ
Originally Posted By: GoBucs
Whatever works for you is great. But just curious, for the people that say mine is mine and his is his, what happens if one of you loses his/her income? My wife has had two government jobs eliminated in the past four years, through no fault of her own. I can't imagine if we had separate accounts. Would she have to ask me for an allowance? That wouldn't seem right.

And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.


In my relationship, I am the only one with a child. I maintain enough cash on hand for 6 mos salary. In the compliance field, unless you really suck, you have great job maneuverability.

We both make approx the same salary.


My Bank was bought-out two years ago. It happens. Say you are out of work for 7 months and your child wants new shoes. Are you then forced to ask your partner for a loan? Just curious. My wife didn't suck at her job, but her's and 299 other well-paying government jobs were moved to DC. I don't expect her to have to beg me for money if she wants to go to a concert with her friends. I'm just curious as to how this works for people with separate accounts.
Posted By: RR Becca

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:02 PM

We're not that strict with ours, GoBucs. It's more of a convenience thing. If he wants a new golf club or gun or whatever, he doesn't have to figure out whether or not we have a couple hundred extra $ he can blow because he already knows how much is in his mad money account.
Posted By: MyBrainHurts

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:06 PM

We married right out of college, and didn't have 2 nickles between us, so it just seemed natural for everything to be joint. We think alike, fortunately, when it comes to saving and spending, and we've never made a significant purchase without talking it over first. We've argued about a lot of things over the years, but not money. We didn't really plan it to be this way. It just happened.
Posted By: HappyGilmore

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:09 PM

Originally Posted By: DeeQ
Mine is mine and his is his. We share a small household account, and yes, I am hoarding my money.


i think this is a discussion for married people eek
Posted By: Bankbb1, PITA

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:12 PM

Ahh if only running shoes were money......

Wait! They use to be money! cry
Posted By: Retired DQ

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:15 PM

Originally Posted By: GoBucs

My Bank was bought-out two years ago. It happens. Say you are out of work for 7 months and your child wants new shoes. Are you then forced to ask your partner for a loan? Just curious.


I would never be out of work, I would maybe not make what I am currently making, but I would also take whatever I could get unitl my real job comes along. Nothing is too below me if I don't have a job.
Posted By: RR Jen

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:19 PM

Originally Posted By: DeeQ


I would never be out of work, I would maybe not make what I am currently making, but I would also take whatever I could get unitl my real job comes along. Nothing is too below me if I don't have a job.


Agreed.
Posted By: RR Sarah

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:22 PM

Originally Posted By: Bankbb1, PITA
and apparently Beanie Babies, cause I never see them anymore either!


They're in a basket in my spare bedroom. They are my retirement plan. By the time I'm ready to retire and sell them on eBay, they will be worth millions!! smirk
Posted By: Bankbb1, PITA

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:29 PM

Originally Posted By: RR Sarah
Originally Posted By: Bankbb1, PITA
and apparently Beanie Babies, cause I never see them anymore either!


They're in a basket in my spare bedroom. They are my retirement plan. By the time I'm ready to retire and sell them on eBay, they will be worth millions!! smirk


I'm afraid this may only be true if you bury them and live long enough for time and pressure to turn them into some sort of really odd precious gems.
Posted By: Wolfy

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:42 PM

Would we be hoarding so much of it if they where not printing so much extra for us to hoard? wink
Posted By: Dazed Auditor

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:49 PM

Originally Posted By: GoBucs
Originally Posted By: DeeQ
Originally Posted By: GoBucs
Whatever works for you is great. But just curious, for the people that say mine is mine and his is his, what happens if one of you loses his/her income? My wife has had two government jobs eliminated in the past four years, through no fault of her own. I can't imagine if we had separate accounts. Would she have to ask me for an allowance? That wouldn't seem right.

And I'm guessing you guys don't have kids, because we spend just about everything on them, or as a family. I don't spend much of anything on myself.


In my relationship, I am the only one with a child. I maintain enough cash on hand for 6 mos salary. In the compliance field, unless you really suck, you have great job maneuverability.

We both make approx the same salary.


My Bank was bought-out two years ago. It happens. Say you are out of work for 7 months and your child wants new shoes. Are you then forced to ask your partner for a loan? Just curious. My wife didn't suck at her job, but her's and 299 other well-paying government jobs were moved to DC. I don't expect her to have to beg me for money if she wants to go to a concert with her friends. I'm just curious as to how this works for people with separate accounts.


My hubs and I have seperate accounts and always have. If for some reason one of us were out of work and running short on money, the other would just transfer some money over. There would be no begging and it would not be considered a loan.
Posted By: Cornfed Turtle

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 02:57 PM

Originally Posted By: GoBucs


My Bank was bought-out two years ago. It happens. Say you are out of work for 7 months and your child wants new shoes. Are you then forced to ask your partner for a loan? Just curious. My wife didn't suck at her job, but her's and 299 other well-paying government jobs were moved to DC. I don't expect her to have to beg me for money if she wants to go to a concert with her friends. I'm just curious as to how this works for people with separate accounts.


My hubby and I have ALWAYS had separate accounts. We are joint on everything, but there are my accounts and his. I've been out of work twice in our marriage. Both times he handed me his checkbook and we both eliminated the extras until I was employed again. He never questioned how I spent "his" money. Just trusted me to get the kids shoes and haircuts and whatever until I had some cash flow again.

We budget together, discuss big purchases and handle the "rainy days" together, too. He has a running joke about his "guitar fund" having become a number of items for the kids. When the kids need something off-budget, it's a topic of discussion and one of us throws money at the other. Our salaries are not equivalent, but it always works out. Twenty years...no hard feelings yet.
Posted By: HappyGilmore

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 03:15 PM

Originally Posted By: Dazed Auditor

My hubs and I have seperate accounts and always have. If for some reason one of us were out of work and running short on money, the other would just transfer some money over. There would be no begging and it would not be considered a loan.


you say that now...but let that no good slug be out of work, sitting around the house unshaved and in his PJs all day because he can't find meaningful work, contemplating life changes...yeah, you won't be too keen to transfer anything but a good swift kick in the behind! Not only will there be begging, there will also be yelling, screaming, kicking, throwing items, etc! All while Offspring's "Get a Job" plays in the background...
Posted By: Matt_B

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 03:34 PM

When something comes up that she can't afford, it ends up on the joint credit card. If it's a need, I pay it off. If it's a want that she wasn't patient enough to save for, then she pays for it. I don't track her card spending, so I'm sure I end up chipping in a lot towards the "wants" along with the needs, but oh well. At the end of the day, if it was something that made her happy, it's worth whatever it cost.

Since we have a great income disparity, it makes it kind of tough to do the mine/hers thing, but since I cover nearly all bills and she only pays her car insurance, cell phone, and student loans as monthly bills and I get the rest, it balances out mostly. She has her savings which typically pays for vacations, and I save for all other things and pay for house projects, vet bills, and all the other fun things. She does most of the cooking and housework (which she'd do full time if she could), and while it's not perfect, it does work for us, and has for the 2 years we've been married and the previous 2 that we lived together.
Posted By: Pale Rider

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 03:51 PM

How did this thread go from hoarding money to how couple and families manage finances?
Posted By: Sinatra Fan

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 03:55 PM

That's the nature of threads: they tend to unravel at times. crazy
Posted By: califgirl

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 03:59 PM

Originally Posted By: Pale Rider
How did this thread go from hoarding money to how couple and families manage finances?


Are you new to the Cooler? smile
Posted By: Peepers

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 04:01 PM

judging by the amount of blank checks I still have it would appear I am hoarding money
Posted By: Truffle Royale

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 04:10 PM

Quote:
I'm just curious as to how this works for people with separate accounts.
We put all the regular bills together and then each of us contribute the same percentage of our salaries to cover them. Both the accounts are joint but I handle one and he handles the other. We tried a single joint account but I want everything entered right away and he's the kind who sits down and enters receipts when the mood strikes him. Money is one of the top three things that can end a marriage so I'm glad we found a way to work around this aspect of it. Honestly tho, it's all ours and we both honor that.
Posted By: HappyGilmore

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 04:44 PM

Originally Posted By: Matt_B
At the end of the day, if it was something that made her happy, it's worth whatever it cost.



oh, you fall for this line of reasoning? How about your happiness? How about she learns that instant gratfication isn't a reality? what if buying a new car every 6 months is what makes her happy? or the latest and greatest fashions from Paris and Milan? you better set some limits on her PDQ or you're in for a lifetime of misery!!!!! shocked
Posted By: Matt_B

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 04:52 PM

Thankfully my wife is rather thrifty and reasonable. She'd never spend that much, and doesn't care much about what's fashionable, or many brand names. For her, a shopping trip generally involves a second-hand or consignment store, where she's perfectly happy to hunt the good deals. She comes home with a pile of things for $50, all happy, until I say "Even if it's 90% off, it's still money you didn't need to spend, so it's not SAVING!". She then gets mad. Not sure why neither one of us have decided to change the start of that conversation to alter the ending. smirk

She also drives a '97 Camry with 290,000 miles on it. She's very reasonable, and generally responsible at least. When she splurges and gets a $120 pair of shoes, it's not that bad. And she can't wear heels, so she'll never get into too much trouble with any shoe.
Posted By: trout22

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 05:52 PM

Quote:
I'm just curious as to how this works for people with separate accounts.


We determine how much we 'need' for living expenses plus savings to which we both contribute equally (as we both make approx. the same salary) - then anything over that amount is mad money into separate accounts. Kiddo stuff comes from the joint account. Extra family expenses just reduce the amount to savings for the month, or big things directly from the savings account.

We started with the 'everything is joint' plan, but I like it better this way - it works especially well when one of you is a spender and the other is a saver.

And of course, I am in charge of the 'joint accounts' wink so we're trying to do our part to contribute to the hoarding issue.
Posted By: Hoosierland

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 06:39 PM

We have been married for 23 years and have always been "everything is joint." My husband is a spender (if he has any cash in his pocket, it must be spent by the end of the day) and comes from a family of spenders. When we got married, he had his own checking account that we kept for a time. . .so I tried to balance the account. He had never, ever balanced it. Yikes.

I have always been the one who keeps track of our accounts. He is happy not to have to do it, although he really needs to know a little more than he does. He has no idea what money we have where, or what bills we have, for that matter.

We discuss all big purchases and generally don't argue much over anything related to money. Maybe because he knows we might be living in a cardboard box if he were the one keeping track of it!!!
Posted By: Peach

Re: St. Louis Fed says consumers are "hoarding money." - 09/04/14 08:44 PM

I am hoarding money, in land. We also have 1 joint account and he has several others in his name. I pay most of the monthly bills and he pays the annual/semi annual bills like propane and car insurance. Ranching only pays annually or not at all so I pick up the house bills and the ranch picks up the "big ticket" items even if it's for the house. 30yrs still working so I guess we got it. I have no idea how much money he has but then again I don't really mind that. If something happens I am sure it's on paper somewhere and If something happens to me whatever he has is enough til he starts selling. Keeping on the thread topic...I do think people are hoarding because the majority are realizing there is no Social Security or they have relatives on it now trying to live on it and they can't.