Monday, August 02, 2010

Avoiding Chelsea's example

Hey, if the Clintons want to spend a few million dollars on their only child's wedding, that's their business. That's what wealthy people do - they spend their money on what they want. Doug Ross has a fine rant about the hypocrisy of the Clintons and their supporters and he contrasts the Clinton's ostentatious spending on their daughter's wedding with the far more modest wedding that the Bushes threw for Jenna Bush. Ross points out that the Clintons could have had a smaller bash and given the difference to Haiti since that is supposed to be Bill's concern. And he points out the fine irony of having the Clintonites defending their spending on the wedding as money that will help the economy. Suddenly, they are now the biggest advocates of trickle-down economics.

But for the rest of us who don't have the spare millions to throw around on one day's celebration, here is some personal finance advice from the WSJ.
People get angry when I point this out. But if your money earns, say, 4% a year above inflation, every dollar you save at age 20 will grow to about $6 by the time you retire. So that $17,500 will grow to about $100,000. If you're financially secure, maybe it doesn't matter so much. But most middle-class Americans are in a far more precarious situation than they realize. They have saved little, if anything, for their retirement, and they are deeply in debt. (Household debts are about twice what they were a decade ago.) And we've seen what can happen to jobs and wages in a slump. In these circumstances, saving money instead of spending it matters very much.
So if you or your child is getting married any time soon, discuss whether the memories of an expensive wedding will compensate for not having that money sitting in the bank gathering interest. There may come a day when that little nest egg put away in place of the fancy cake and flowers and the joy of entertaining a few hundred of your closest friends.