More saving and more giving

Believe it or not, now is the time to consider more saving and giving.

That’s according to Jeff Rosensweig, an associate professor of International Business and Finance and the director of the Global Perspectives Program at Emory University’s Goizueta School of Business in Atlanta, Georgia.

An economist and expert on global economics, Rosensweig says today’s consumers need to watch their debt, spend responsibly and consider giving to those most affected by the current economic crisis.

He talked with CNN.com/Live.

Question: What’s the number one thing consumers need to be doing?

Rosensweig: They need to be very careful about going in debt. So many people pay such high interest rates – I call it the “debt trap.” People get a credit card and they pay 18 percent or 27 percent. They’ll never pay out of that.

I think people can be looking for bargains, they shouldn’t be afraid to buy, but do not get into a debt trap.

Question: If you are in a debt trap, what should you do?

Rosensweig: The first thing you should do is there are free credit counselors.

You don’t have to go pay someone and consolidate the loans. There are a lot of private places, almost like charities as well as government places that help to get people credit counseling.

Then the thing to do is to pay off the highest-interest-rate loans first. Get rid of that high interest rate.

People work hard their whole lives and they end up at age 60 and they have nothing. It’s amazing because for more than half the Americans, that’s their story and it’s not that they didn’t work hard, but it’s because they abused credit.

You can use credit when it helps you, but don’t abuse it.

Question: If you have debt, how can you save?

Rosensweig: For the nation as a whole, we don’t want people to save too much. We need people to go out and buy things so that their neighbors continue to have jobs.

But I do think that you have to try and save 20 percent of your income if you have a good income, if not, at least 10 percent. Even though you might be giving up things now, and not just wild luxuries, but things that hurt, remember that with these high interest rates we’re talking about –literally, with an 18 percent interest rate if you let it go and you don’t pay it all back, four years from now you’ll owe twice as much.

So you’re cutting into maybe not just fat now, but fat and muscle by cutting down and trying to save, but it’s going to be all muscle you are cutting into in four years.

Now it might be trips or eating out, but in four years it could be eating anything decent. I’m not saying don’t go out every once in awhile, but you have to say to yourself, “Is that really worth blowing 100 bucks or 200 bucks?”

Question: We keep hearing that we are supposed to spend to help the economy, but how can we balance that with the need to pay off debt and save?

Rosensweig: This is what we nerdy economists call “a fallacy of composition.” If you add up the whole country and compose the whole country, we need the country to be spending.

But we are all individuals. As individuals, we can’t carry a country of whole country of 300 million people. If we do our patriotic duty by spending as much as we can, we are doing a little bit for the economy but we are just one little pebble on a lake of 300 million people. So we each need to look at our own individual situation and say “What can I do?”

I have a very secure job as a professor and therefore I do feel a sense of responsibility. One thing that I am doing is  –whereas many people are cutting their giving to charities – I’m doing just the opposite. I feel that I am blessed to still have my job so I am really ramping up my giving.

That’s how I think I can do my part. There are people out there really hurting. I am even targeting my charity in terms of “What about people who are becoming homeless,” and that type of thing.

It’s always good to give and it’s good psychologically. It’s good to realize that things could be bad for me, but it’s all relative.

CNN.com/Live will have expert financial advice and news coverage throughout the day, including President Obama’s address to the nation at 9 p.m. ET tonight.