My husband and I like to play the “Lottery/Rich Uncle Game” that starts out, What would you do if you won/inherited/found _____ dollars? (Warning: for entertainment only, not investment purposes). You’ve played some version of it, right? We dream up vacations we will never take and house projects we will never start and checks we will never write and gifts we will never give.
Then we wonder about the practical stuff: Would I still clip coupons? Would my husband quit his job? Would I still clothe my children from clearance racks? Would my husband still be obsessed with lowering our energy bill?
Last Friday’s Oregonian featured an article by Laura Gunderson that reminded me of this game (follow the link below to read the entire article). She was exploring whether frugal practices, picked up during this recession, will actually stick once the economy rebounds. Maybe your husband lost his job or your house lost its value; maybe you had to stop getting manicures or mochas. As a result, you learned how to sew or change your car’s oil or clip coupons or bake bread. When your income rises, will these frugal habits drop? This economy has impacted all of us in different ways, and we have all responded with different degrees of frugality. Are those new skills a true lifestyle change or a temporary necessity?
Check out these articles for more interesting observations on the topic:
Shoppers, Paschel said, simply have tried a few behaviors through this recession that helped alleviate anxiety. They’ve cut coupons, scoured weekly ads and visited discount stores. Such tactics may trim parts of a consumer’s budget, but didn’t always portray deep-seated spending changes.
That’s especially true for consumers who weren’t directly affected by the recession, say by furlough days or pay cuts. Sacrifices aren’t fun and retail experts say those who tried frugal for appearances’ sake will be the first to dump their thrifty ways. Indeed, high-end purse purveyor Coach Inc. announced this week its second-quarter net income had risen by 26 percent… And while consumer confidence remains sluggish, analysts say there’s a widening gap between what consumers say they’ll spend and what they actually buy. One just needs to refer back to the bustling holiday shopping season, which hit sales levels retailers hadn’t seen since 2006.
I have no doubt from watching my parents’ generation, which lived through the Great Depression of the 1930s, that their habits were shaped for life by the experience. Even though incomes improved steadily following the Second World War, frugality was ingrained in everything from the way the conscientiously consumed leftovers to how they planned even fairly minor purchases that my generation tends to buy on impulse.
But today’s consumers have grown up with short memories and in a free-spending ethos where easy credit and instant gratification rule the day. An economic shock like the one the world has just gone through can certainly serve as a tap on the brakes. But I don’t personally expect to see much more than the equivalent of slowing down for a curve.
People practicing spending habits honed in recession by The Associated Press:
… many changes in spending habits that most Americans first saw as temporary have taken hold, perhaps for good, some economists say. This is the reality of the new American consumer — focused, cautious and tactical.
These behavioral shifts aren’t at the extremes of the Great Depression, which produced changes so drastic that many who lived through it adopted frugality as a lifelong habit. Still, some experts say the changes from the recession of 2007, 2008 and 2009 could last.
“This was a massive cultural event for our society,” says John Gerzema, a branding executive at marketing and advertising firm Young & Rubicam and co-author of a new book about the changing ways we spend money. “Eighty percent of Americans were born after World War II, so essentially this is our Depression.”
Pollsters and experts have different opinions on the topic, but they raise an interesting question that’s worth asking. Are we truly commited to be content, spend wisely, give generously, and leave a legacy or… are these just temporary tools to help us survive a tough time?
Opinions? Observations? Leave a comment!
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