Consumer spending accounts for about 70% of economic activity in the United States. When people decrease their spending, some companies and businesses have no choice but to close up or reduce production, both of which result in layoffs. Therefore, it is quite normal to feel "guilty" about saving (read: not spending), especially when unemployment figures continue to rise. It can feel like saving money is puttting people out of work. Individuals and families need to make financial decisions to save or spend money based on their own individual circumstances and their financial goals. Unfortunately, many people have high debt balances and/or lack the recommended emergency savings fund of at least three to six months' expenses set aside. Others are employed in industries where their job stability is shaky or where layoffs have already occurred. In this situation, it is wise to increase your emergency reserves and pay off debt as quickly as possible. On the other hand, for families and consumers with adequate savings for emergencies, job stability, and little or no debt, a recession can present opportunities. It can be an excellent time to spend money because prices are often very attractive for many items such as clothing, travel, and cars. Many items are "on sale" at a deep discount. Again, people need to do what's best for them. No one consumer alone is going to change the economy by the way that he or she decides to spend or save money. We would like your feedback on this Personal Finance Frequently Asked Question.

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