Contrary to the TV footage of the January sales, Australians have become a nation of savers.

Not only have we been saving, we have also been paying down credit card debt and maintaining our mortgage repayments despite falling interest rates.

In fact, after a decline in December, APRA’s January figures show that deposits grew 1.4% and credit card balances declined 1.2%.

So basically we are doing everything we have been taught to do, but not when the government want us to do it!

As everyone knows, the government hand-outs, the most recent round of which are hitting bank accounts this week, were intended to help stimulate the economy.

Basically, the government was hoping we would put that money back in to the economy to help keep it ticking over and help Australia through this economic downturn.

But like the thrifty squirrel who stockpiled nuts for the leaner months, Australians are putting their bonus payments to good use paying down debt or in an interest-earning savings account.

What is interesting to consider is whether this is the best strategy. In fact it brings to mind the paradox of thrift, an idea first suggested by English economist John Maynard Keynes back in the early 1900s.

Essentially it states that if everyone saves money in an economic downturn, we will actually damage the economy further by reducing demand and, as a result, economic growth. (Great news for all the super-consumers out there!)

There are those who would disagree with this, saying that if demand slackens and prices fall, the resulting lower price will actually stimulate demand.

So what does this mean for Australians today? Should we spend, or should we save?

Essentially, as always, it comes down to what people feel comfortable doing and what their financial situation is.

If you are comfortable financially, you are actually in a great position to take advantage of the multitude of sales and discounts on offer as retailers around the country feel the pinch. And if you are very comfortable financially, you can take advantage of the really big savings which can be made on the property market and on luxury goods such as cars and holidays.

But what about the rest of us?

Well, saving for a rainy day has never been a terrible option. Nor has reducing debt. So no one can tell you to stop saving and to start spending just because it’s what’s good for the Australian economy. You have to think about what’s best for you.

But if you have been putting aside money while paying down your debt, when you are feeling more confident in the economy and want to make a bigger purchase or two, you will have the money in the bank to do so.

In the meantime you can take advantage of the fantastic rates on savings accounts and the falling rates on home loans, which will help put you in a good place financially.

So there’s not one answer or one golden rule. It is up to you, and your financial adviser, to decide what the best strategy is for you.

I personally am taking a leaf out of the squirrel’s book, while my wife is more of a ‘let’s keep the economy ticking over’ super-consumer, so between the two of us I think we’re doing our bit for the economy.

*As always, these are just my thoughts and opinions – please don’t take it as advice. Before you make any decisions make sure you talk to your financial adviser who actually knows your circumstances.