We’re usually pretty pro-save around here, regarding it as a key aspect to an overall sound personal finance plan. However, there is the larger issue of how your saving affects the overall economy. Some folks believe that when the economy is sagging that throwing money in the bank is further aggravating the problem. Conversely, others feel that putting money in the bank allows the bank to lend more money out–thus helping to stimulate the economy.
For the most part in the US, what we see in a recession, much like we’re seeing now, is that savings rates tend to climb. That is, more people start socking their money away in order to, presumably, weather the storm.
In the US in fact, there is currently a campaign called Feed the Pig designed to encourage folks to save. The site has some great advice on saving money and many tips for putting a little extra aside.
In Finland, however, the government is encouraging people to spend money in order to boost the economy. They’ve begun an ad campaign with an evil piggy bank–implying that in these tough times the thing to do for the good of the economy and the country is to keep on spending in order to spread the money around.
NPR has a nice little feature comparing the different approaches from the US and Finland.