Australians are saving less, according a new report this week. It reinforces the trend of people taking out bigger loans and spending up more on their credit cards. Is anyone to blame, and is it really that bad?

I’m a student of economics, having never had any desire whatsoever to become an accountant. It may well be true to say that there will never be a lack of demand for accountants — whether it’s people trying to sort out their tax returns, or big businesses in need of audits. Yet as secure as employment may generally be for accountants, I also find it to be one of the most painfully dull professions on the face of this earth. That’s not to say I think accountants are dull — I know plenty of people who’ve studied accounting who are anything but. In fact, I have tremendous respect for accountants, and their obviously high threshold for boredom.

As part of my degree, I have had to complete an introductory unit in accounting — indeed, I did quite well in it, though even a 100% result couldn’t have convinced me to pursue it further. One of the first concepts we were introduced to was the idea of double ledger accounting. Now, for those who don’t know, double ledger accounting basically operates on the basis that every transaction has two sides, and it is a core principle of double ledger accounting that every debit has a credit. If we buy something, we gain an asset (debit), but we also forfeit cash or we incur a debt to be repaid at a later stage (credit).

Of course, thankfully, you don’t need to be an accountant to understand this. Quite to the contrary, it is a reality consumers face every single day — we like to buy stuff. That’s great, because ultimately an economy is driven by people buying stuff. Stuff is generally good, and we like having stuff in our lives. Stuff is a cornerstone of economics. Yet, as that great economic proverb asserts, “there’s no such thing as a free lunch”. We don’t often get stuff for free — in order to get stuff, we have to buy it. Routinely, we’ll buy stuff with cash — money in our wallets, or money in our bank accounts. It’s money we’ve earned, that we have rights to today. Yet sometimes, perhaps because it’s easier, or perhaps because we don’t yet have the cash ourselves, we choose to incur a debt — we seek to pay for current stuff using future expected income.

Notionally, this isn’t a problem at all. If we assume that we like having stuff, we can also assume that we don’t like having stuff forcibly taken from us because it turns out we can’t afford to pay for it. Therefore, when we incur a debt — perhaps we take out a loan, or we pay for something using a credit card — we do so with the belief that we will have the capacity to pay off that debt in the future, or else face the possibility that the stuff we’ve bought will be taken from us. That’s fine, except on what basis can we have that belief, that expectation about our futures? After all, we don’t control the future — we accept anything can happen. Indeed, that’s one reason that we like buying stuff today rather than waiting until tomorrow — we can’t actually be sure that tomorrow will come for us.