Thursday, April 15, 2010

Futile Frugality

I'm starting to feel foolish about being a saver.

Writing isn't a big-bucks pursuit, but I've managed to support a decent lifestyle and sock away at least 10 percent of my gross income every year of my professional life.

My reward for this fiscal discipline? 1% interest. Inflation ran at 2.63% during 2009. 

Soon banks will be asking me to pay for the privilege of storing funds they can lend out at much higher interest rates. Where's the incentive to save? We're all aware that the financial crisis has hit over-leveraged customers. But what's not discussed is how those who eschew debt are paying dearly for doing the "right" thing.

Back in 2000, the average 6-month CD paid 6.5% interest while inflation was at 3.7%. This seems to my non-mathematical mind to be a golden ratio of sorts. I'm not suggesting we go back to, say, the rotten early 80s when a CD could pull 15.77% and inflation was 8.4%. But come on, bankers. Give a girl a reason to keep feeding the piggy.