a small increase in spending over many years rather than a big increase in the present.
Consumption smoothing is the process of maximizing our level of living by making sure that we strike the right balance between spending and saving money during the various stages of our lives. To enjoy a greater standard of living, those who spend excessively and put off saving for retirement frequently end up working longer or having a worse standard of living after retirement. Oversavers will live more modestly while employed in order to retire with a better standard of living.
A fine line must be drawn while balancing retirement savings. Theoretically, a greater quality of living might be attained by having a better awareness of the requirements for saving and spending to balance out the level of life. One of the biggest difficulties in financial planning is finding a balance.
Therefore, As a result of consumption smoothing, a one-time-only tax rebate tends to create a small increase in spending over many years rather than a big increase in the present.
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