Save a Buck, Lose a Dollar

by Ed_Cooney 3. November 2012 04:32

Money is like blood.  It needs to keep moving to keep the economy going.  When it flows out of the local economy, it leaves a wound.

We all realize we live in a global economy.  No issues there.  The increased competition makes us work smarter and maximizes our potential.  What happens when a disproportionate amount of money leaves your local economy through the purchase of goods and services from other areas?  The dollar you saved by purchasing an item from a ‘big box’ rather than your locally owned store, may very well come back to bite you in the form of higher taxes and depreciated real estate values.  For argument’s sake, say the number of jobs remains the same but are just consolidated from 10 locally owned businesses to one out-of-state big box.  Where do the profits go?  Easy - to the corporate headquarters and distant shareholders who generate WEALTH through higher per capita incomes and substantially higher levels of investment in THEIR community. 

What can you do??  Easy - pay the extra buck to support your friends and neighbors.  This will keep them in business, which will keep the retail space leased and their mortgages paid.  They, in return, will pay a slightly higher price to you at your place of business, resulting in a heightened velocity of money.  The taxes paid by each of you will result in better schools and improved public services. Essentially, your net cash in and out is a wash and your community is more stable. 

Supporting local businesses feels good because it is good. 

 

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