Jeff Bezos Says to 'Hold Onto Your Money' Right Now. Here's Why He May Be Right

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  • Jeff Bezos suggests holding onto your money right now to see what happens with the economy.
  • Listening to him could be worthwhile since there's a threat of a recession.
  • Having extra money in the bank would be very helpful in the event of a recession.

Bezos' advice could help you avoid financial disaster in case of an economic downturn.

If you're trying to decide whether or not to make a big purchase right now, you may want to hold off on breaking out the credit cards and moving forward with buying the item you've been eyeing.

In fact, the founder of Amazon offered some advice to consumers about spending habits right now that could be very important to listen to. Here's what Jeff Bezos had to say.

Bezos doesn't think you should spend money now for this important reason

It may seem odd for the founder of a huge online retailer to suggest that consumers shouldn't spend money right now. But that's the exact advice that Jeff Bezos gave in a recent interview on CNN.

"If you're an individual considering purchasing a big-screen TV, you might want to wait, hold onto your money, and see what transpires,” Amazon's founder advised. “The same is true with a new automobile, refrigerator, or whatever else."

There's a simple and important reason why Bezos urged putting off big purchases at the moment. Bezos believes the economy "does not look good right now."

Specifically, he elaborated on this point to suggest he thinks a recession and an increase in layoffs could be coming. "Things are slowing down. You're seeing layoffs in many many sectors of the economy," Bezos said.

In light of the fact that there's a lot of signs an economic slowdown and higher unemployment is on the way, Bezos believes waiting to make purchases could help you "remove some risk from the equation."

Is Bezos right?

Bezos is not the only renowned business leader or financial expert who is warning of a coming economic downturn.

In fact, some experts believe that the country is already in a recession. And plenty of others warn that a recession is imminent. If the country enters a recession, or a period of economic downturn, this could very well mean that many companies do cut staff members, and it's possible that your income will decrease or your job could be eliminated altogether.

When there's a threatened economic slowdown or a higher-than-normal chance of a job loss, putting some extra cash in the bank could be a far smarter choice than buying items like appliances or TVs that tend to lose their value after purchase and can't easily be resold. This is especially true if you might have to go into debt to buy these items.

If you spend money instead of saving it right now, you would have less cash to tide you over in case of an income drop -- which could mean you have more trouble paying important bills such as your mortgage or car payment. You will also have less peace of mind going into a recession if you have extra stuff but not as much cash in your savings account to see you through tough times.

Borrowing for big purchases would be even worse, though, because then not only would you have less cash but you'd have committed to a new monthly payment you have to make.

Since there is a lot of concern from multiple financial and business leaders, heeding Bezos' advice and avoiding unnecessary buys right now could be a smart decision. If it turns out the economy is stronger than expected, you can always make your purchase later on -- but you can't go back and undo your purchase if things go south.

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