Magazine article Management Today

A Current Account Conundrum

Magazine article Management Today

A Current Account Conundrum

Article excerpt

It wasn't the best of times - but on the other hand it wasn't the worst of times either. Infact, just recently, it was one of those unusual times when, by some accident or other, my income seemed to be in excess of my expenditure. Now, admittedly, the difference between what I was managing to earn and what I was managing to spend was not by any means large.

But, even so, we all know what happens to countries like Japan which start to run up a persistent current account surplus. As a result I was naturally anxious not to find myself destabilising that part of the global economy which has localised itself around my existence primarily as a consumer - and only occasionally as a provider - of goods and services.

Now, of course, it's easy enough if you're a country or even a major international company. You just cut taxes, push up the exchange rate and do something with the Base Lending Rate. Or, alternatively, you increase dividends or diversify the business into something exciting and loss-making like film studios.

But things aren't that simple when you're an individual. Try to pay over the odds for a packet of crisps in Sainsbury's and you find yourself getting some pretty odd looks from the girl at the check-out. Try to acquire some exciting money-spending friends and you discover the wife frowning at you with more than the usual amount of disapproval.

I was sharing this problem with a financial friend who in previous times has been more than helpful with a variety of roll-over-rescheduled-debt-repayment plans - but this time even he admitted himself baffled. `It's a sort of problem where you've just got too much money coming in and not enough going out, isn't it?' he said after I'd explained my position.

`That just about sums it up,' I agreed. `Do you think you can sort something out?'

He smiled ruefully. `Difficult to say, old man - havin't had a case like this for years. It's not really my line any more. You'll need to consult a pensions specialist or someone used to getting through lots of cash quickly.'

But, as it turned out, even the pensions specialist seemed a bit dejected when I explained the problem and told him that my wife had wondered whether it mightn't be a good idea to put some money aside in a pension so that we could have a prosperous and comfortable old age. …

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