It seems that many people have gotten tired of cutting back, living within their means, paying off their debts. The word in the retail establishments was that it was a good Christmas. People get tired of doing without, whether they can afford it or not.
Let's think this one through.
IF you have a good secure job (you're absolutely positive that you will not be laid off)....
Whoa! Let's stop here. Is there anyone in this country that can say that about their job without fooling themselves? Even if you work for yourself, can you be that sure that next year your business will be humming along? Even if you're on Social Security, can you say for sure that you will not have your benefits cut? There are some legislators in Washington that are just dying to cut your benefits.
IF you have a good secure income, and you have your debt well in control...
Whoa! Is your house paid off? If not, is it underwater (financially-speaking)? 41% of mortgaged homes in the Denver area are underwater. (Of course if it's actually under water, you've got other problems that we won't discuss here.)
Is your car (cars?) paid off?
Do you pay your credit card bill off every month? Is your income high enough to pay your credit card bill down every month? If not, you've got to be losing ground; your credit cards are in control, or you could say your spending is in control of you, rather than vice versa.
If you are a two-income household, could you pay all your bills if one of you lost their job? Could you pay off that car? Could you pay off your credit card bills? Would you have to walk away from your mortgage?
IF you have a good secure income, and you truly do have your debts either paid off or well in control, and you are investing in your retirement.....
Whoa! What retirement? You have to work until you die because you can't afford to retire? There are precious few jobs that will let you work until you're elderly, significantly past 65. You may find that as you get older, you don't have quite the energy you did as a youngster. There are plenty of elderly people who do have lots of energy, excellent health, all their marbles, and valuable experience to bring to their employment, so I'm not down on the elderly. But are you sure you will be one of those super-energized, irresistible older workers who are immune to layoffs and ill health? Even then, plenty of older people will tell you how difficult it is to find any position at all, even entry-level, if you're over 55.
So maybe you should try to sock a little away if you are still employed. If you leave work anywhere near the usual age, your nest egg has to keep you fed and housed for at least an average 15-20 years, and possibly up to 30, 40 or more.
IF you have a good secure job, your debts under control, and your retirement accounts in good order, are you prepared for economic hurricanes that could come down the pike at us? Another run-up in gas and diesel prices? (It'll probably happen this year. Look at what's happening in the Middle East!) Food costs going up when diesel goes up? A big unexpected medical bill? Utility costs rising significantly?
But you deserve that luxury... your child deserves that expensive toy she has her heart set on... You can't say no to her, or to your spouse, or to yourself? If not now, then when?
The future looks a little grim right now. Nobody's doing very well except the banks. They're sitting on piles of cash, carefully not loaning it. Unemployment is still stubbornly high and will probably remain so for five years at least. Real estate prices have farther to fall, until the huge backlog of repossessed property is cleared.
But spending is fun! spending is necessary! Think it through: what kind of spending?
There's spending for consumer trash, filling up your already-overfilled house. It's easy to buy too much cheap stuff from China and other countries. It just ends up to be a disposal problem when you get tired of it, it breaks, it goes out of style, it goes the way of all such trash. This doesn't look like a very good idea.
Then there's spending for useful stuff: Stocking up on food staples now, before the price goes up. Improving the insulation of your house to save on utility bills later. Paying off your debt so you'll be flexible in the future. Choosing your luxuries carefully: good value for the money, classic style, long-lasting or repairable, something you're thrilled to have that will make you happy to see it in three years or three decades. Educating yourself or family members; this includes classes in philosophy, tai chi, knitting, tennis, mathematics, great books, electronics repair, woodworking.... the list is endless.
Spending on good quality food, and learning to cook it properly. (Another opportunity for a class, right?) This will pay off in health and happiness and knowledge. Learning is one thing that never goes out of fashion. You can have a better life without spending more money and getting more stuff. You only have to get your head back from the advertisers, and take control again.