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Your Take: Will Your Recession Changes Stick?

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Almost Empty WagamamasWhile most of us don’t believe we’re out of the recession, no matter what the statistics say, we can all agree that we made a few sacrifices over the last year and a half. Some have made a lot of sacrifices. One of the things my wife and I cut back on was dining out. We would go out to restaurants several times a week, not counting weekend festivities with our friends. For a dual income, no kid household, it’s not uncommon because our other expenses are generally low. However, with the uncertainty of the recession and my wife starting a PhD program, we thought that cutting back on one of our largest expenses was a smart idea and we believe the changes will stick even after the economy truly recovers.

We decided to cut back for health reasons too. We weren’t eating at unhealthy places (our favorite was a local Vietnamese noodle Pho restaurant) but anytime you eat out, you are almost guaranteed to eat far more calories than at home. By cooking at home, you control what goes into your food and you’re more likely to serve more reasonable portions.

A side benefit of cooking more at home is that we’ve experimented more with some fun recipes. Some highlights include our Homemade Provençal Rack of Lamb earlier this year and the occasional homemade dumpling (by the way, I’m getting hungry writing this… so don’t click through unless you’ve eaten!), but more importantly we’ve added a lot of recipes to our “list of dishes we liked that we can make from memory.” I think it’s crucial for you to build up that portfolio of dishes because you’re less likely to go to a restaurant if you have a few things you can make yourself.

Finally, we found that cooking together is fun. We get to experiment, make mistakes, substitute ingredients we think we’d like more, and otherwise just have a great time spending time together working towards a fairly simple goal. We made the Provençal Rack of Lamb on a whim and lucked out that we didn’t mess it up on the first try. :) But had we screwed it up, no worries, we can always try again! (if you love eating out, you can always try to make it at home using what are known as “copy cat recipes,” just do a Google search)

Because of all those reasons, I’m pretty sure we’ll continue to cook more and eat out less even after the recession ends. It’s morphed from a “save money, save calories” decision to a “wow this is a lot of fun.”

Has something like that happened with you? Maybe you cut off cable television service for financial reasons and found a plethora of alternatives you liked better? Or maybe you went from two cars to one and found you liked that arrangement better? I’d love to hear it because then we could all give it a try.

(Photo: avlxyz)

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37 Responses to “Your Take: Will Your Recession Changes Stick?”

  1. Peter says:

    We were already living pretty frugal before the recession, so we haven’t made many changes. Like you we’re a dual income couple, and our expenses are pretty low, mainly just our mortgage and utilities/etc. We probably should start making some small changes, like your eating out less change. Other than wanting to make changes like that – we really haven’t changed much. But when you’re already frugal before something bad happens, i guess it makes it easier just to continue.

  2. Soccer9040 says:

    We also havnt made many changes because we were pretty lean before this whole thing went down. By paying yourself 1st and practicing artificial scarcity we basically make our savings plan hurt. There isnt anything left over at the end of the month…but thats by design.

    I am curious to see what the rest of the readers’ take on this is. Hopefully people continue to save and don’t just throw everything they have started to do to be frugal away.

  3. zapeta says:

    Like the others, we’ve always been pretty frugal. We have reduced our dining out some, and we checked our cell phone and cable plans to see if there was anything we could cut there to save some money. To be honest these changes were so small that we don’t notice so I expect that we will stick with them.

  4. e-beth says:

    No dual income here, but like the other commenters I was already cutting back way before the recession.

    I think people who read PF blogs are already in good shape, but I think in general most people will start to spend more once things get better. I guess it’s lifestyle inflation again.

  5. Like you, my husband and I enjoy eating out several times a week. Due to the recession (and him getting laid off), we have learned to cook more often and be a lot more frugal than we ever have. I really believe these habits will stick after the recession is over because it has changed my perspective on money and we are now much more aware of what could happen in the future and things we need to save for.

  6. Annie G says:

    We have budgeted for years, so we are constantly tweaking our spending, saving, etc.

    But, we have certainly cut back more in the last 2 years. Like when my hubby’s company dropped their 401k match, we knew we needed to up our contributions to our regular investment account to make up the difference. We have also been stockpiling money this year in case of a lay off (which we found out yesterday that we definitely dodged). In fact, in the last 6 months, we have found that we can live on much less money than we had before.

    This year our savings rate (including extra paid on our mortgage) will be near 60% of our after tax income. That is, by far, the largest saving rate we have ever achieved.

    Will we continue? I think, due to health reasons, eating out will stay near 1 – 2 times total per week, although my husband may go back to eating out lunch one day a week. And there are certainly other cuts we made that we will stick with. On the other hand, much of our savings has come from delaying purchases and home improvements, many of which will need to be bought/done eventually. (Cause although we CAN live with the old couch in our living room or the window screens with holes in them, etc, we really don’t want to forever.)

  7. NateUVM says:

    The things that changed that will stick are the things that we probably already should have been doing before the crisis hit… Combining our cell phones plans into a family plan, returning the extra cable box, etc… We’d never carried any debt and we always “pay ourselves first,” anyway, so I don’t see that changing once things turn around.

    The one thing we MIGHT go back to doing once things turn around…? Going out to eat! It’s not that we don’t like making our own food, it’s just that we NEVER go out to eat. At all. I can see us kicking that up to once a month, or so. But probably no more than that.

  8. johnpmcglynn says:

    My wife and I have done the same, but we also look for restaurant coupons online. Just type in the name of the restaurant and the word coupon and see what shows up. We’ve found some great deals.

  9. pcallaghan says:

    To an extent I believe things will remain the same… we cut back drastically so that we could be sure of our future plans. We just bought a house so the next month or so spending may be u as we really have 0 furniture, need to paint, etc. Luckily we don’t have to worry about the cable bill (I work for a cable provider), I’ll be going back to school so student loans will be deferred for awhile.

    One thing that will stick is since the recession started I’ve been paying off the stupidity of my credit card when I was in school. Once thats gone, cards will be paid off and I’ll concentrate on using those that give me rewards that will be worthwhile to me.

  10. jsbrendog says:

    being only a few years removed from college when the economy went in the tank I took that opportunity to actually start treating my finances in an aduilt and mature way (which brought me to this and other financial blogs) so the results of my recession rxn will definitely stick (401(k)/ira donations, trying to save a large portion of my disposable income, and finding other ways to ahve fun without spending lots of money, ie bars, etc etc)

    the one thing that probably won’t stick is, as with msot everyone else, I cut bakc on going out to eat but the gf and I like to go out to dinner once a month ro something and it is something I would like to get back to. other than that I don’t see any reversion

  11. Chris says:

    My family also stopped going out as much.
    Now we try to cook meals together and all participate in building the weekly menu.

  12. Gates VP says:

    Hey @Jim, you may be asking the wrong crowd here :) (60% of after tax income!!!)

    But will the changes stick for “normal people”? You bet! Basically everyone born before 1982, just went through the craziest “leveraging of all time”. With a ridiculous rise in personal debt basically across the board.

    If you look at the current jump in “savings rate” what that really means is that people are paying off existing debt. But it’s still well behind historical norms and it’s really behind the 5-15% that we probably need (as a society) over the long term.

    But the underlying truth is that in many ways this is not a recession. This is a return to the mean. The changes people are making are changes towards more normal spending behaviors.

    These changes really need to stick or we’re going to have these crises again.

    • Steven says:

      Normal spending is relative, I think the proper term is responsible. Because overspending was the norm.

      Will it stick? Nope, i believe it’s just a fad. People want instant gratification, and during this time, frugality just happened to be the means to the end.

      • Gates VP says:

        Yes, people want instant gratification. But the last decade has been defined by instant gratification on cheap credit.

        Let me illustrate with an example.

        In 2002, my friend, a $12 / hour McWorker was approved for a 0% new car loan on a Sunfire (GM car). With insurance, the cost of the new car amounted to about $3+ / hour or somewhere in the region of 25% of his gross pay.

        Obviously, the car cost became an immense burden on his life. As expected he ran into problems making the payments and keeping the car in working repair, his first accident caused him lots of trouble and he drove around with a dinged bumper for months.

        At the end of the day, I can easily blame my friend for the poor decisions, but the car company is also under-water on a bad loan. A loan with terms that nobody would have given in 1992 or 1982 or 1972.

        The key here is not about what people want, it’s about what they can get. At the very lowest level, much of the housing crisis was about people getting into houses they couldn’t afford. Whether by deceit or greed or just poor decision-making, lots of “instant gratification” people were suddenly “unleashed”. They were given giant instant gratification budgets that they’d never had.

        But it’s done for now. Investors & regulators are not going to let this stuff happen again for at least another generation (until everyone forgets).

        Credit cards are tightening, banks are tightening, investors are tightening. Everyone is squeezing excess credit out of the market. It doesn’t matter how badly my sample friend wants a new car, nobody is now going to give him the money, they know he can’t afford it (and they can’t afford the default).

        So you’re right that people want instant gratification, but these next years are going to be marked by their inability to get it.

  13. Foo Finance says:

    I must admit the my habits were basically the same before things started to get bad. I have cut back on going out and eating out but that is the result of my own budgeting and lifestyle deflation.

    I also just bought a house and remodeled it, finally getting ahold of my debt snowball plan, and working on a more adequate emergency fund. Having to worry (a little) about losing my job in the back of my mind does help push me to pay more attention.

    That said I think once I have my debts knocked out and get back in line financially I will continue the trend. I want to achieve financial freedom as soon as possible and that will take dedication and focus on my part!

    I also agree with using coupons (lots out there!) and gift certificates (not bought by me) to spend less and still enjoy eating out is good. I think cooking is fun too but sometimes I need a break. To me it is all about balance.

    - Bobby
    (Foo Finance)

  14. drriffe says:

    This may sound insensitive to some and I’m interested in others observations, but living in the Northeast and working in the Big Apple;

    I can say if not for the daily news I would have never known it was a recession.

    The restaurants we go to haven’t seen a reduction in patrons and most that I have talked to lives haven’t changed that much if any.

  15. Foo Finance says:

    @drriffe: ABSOLUTELY. The news always blows things out of proportion. This is why I refuse to own a TV or cable service. I have internet and that is it!

    I save around $100 a month not having either of these and have time to do things I actually like and want to do. I don’t miss it at all and have not had one since 2004!

    - Bobby

  16. lostAnnfound says:

    We changed cell phone services from a contract plan to a pay as you go earlier this year & next week I’m discontinuing mine altogether. My husband is going to keep his pay as you go because he’s out driving for work. I am going to give it a couple of months and if I find it is not working out, I’ll go back to pay as you go.

    Also, we didn’t eat out much before, so there really wasn’t a lot there to cut back, but we do look for coupons now for dining out. Restaurant.com is a good place to start.

    • Gates VP says:

      Hear hear for pre-paid cell phones.

      They’ve been much-maligned as “phones for the poor”. But for many people they’re actually the more efficient alternative.

      Pre-paids can go for less than $20 / month for the non-addicts.

    • Rosa Rugosa says:

      I’ve never had a cellphone, and hope never to have one. The appeal eludes me. “What about emergencies,” they ask. I guess whatever I did before cellphones were invented. Since I’ve never had one, it’s a pretty seamless transition for me.

  17. Alicia says:

    My husband and I have made a concious effort to reduce the amount we spend on going out to eat. And rather than not get together with friends we are getting together with them the same, just having dinner at their house or our house and we are splitting the menu so the host doesn’t bear the entire burden. It makes it really fun and a lot less expensive.

  18. Just want to say congrats to all who’ve hung on!

    I believe the US consumer will never change, which is good, b/c over consumption helps corporate profits, which leads to more jobs.

    • saladdin says:

      Fact is consumption drives the economy. We HAVE to have people who spend or the economy will implode (or is it explode?)Just watch, 2-3 years after these mass BK’s there will be a run-up in spending when all those BK’s age enough for people to get more credit.

      It’s in our DNA to want now, no matter the cost.

      saladdin

  19. Julio says:

    The biggest change my wife and I made a couple of years ago was to cancel cable and install an OTA antenna. We get about 25 channels in our area all in HD and that is more TV than we care to watch. We then used the savings in both time and money to join a gym together and haven’t looked back since. Can’t describe the huge improvement it’s made in our lives and we can’t picture ourselves going back to being slaves to the TV.

  20. eric says:

    Oh my god you’re right…I’m starving now. Dumplings!

  21. I’ve been cooking a lot more and I’ve really been enjoying it. I will definitely keep that up.

  22. saladdin says:

    I work in the retail business for a publicly traded company. I know scared. But I am also very simple. I have never owned a cellphone or have ever sent a single text message. I have never owned a digital camera, or hand held video recorder. The truth is that this is not intentional. It’s just the way I am. But I also save/invest over 40% of take home pay. And I’m happy. Especially at the prospect of early retirement.

  23. AmandaDRowe says:

    I definitely stopped eating out as often or hitting the bar scene quite as much. This wasn’t entirely for money reasons though. I also stopped going to B&N when I discovered Paper Back Swap. I think I’ll continue to do all this despite the recession because I enjoy it just as much. However, like everyone else I was always frugal – I get the impression that this is an extremely skewed audience.

  24. Rosa Rugosa says:

    We are definitely eating out less. My husband is a superb cook, and we’ve found we can do a really nice Saturday night dinner at home that beats most restaurant experiences for a tiny fraction of the cost of dinner out.
    I’ve also learned that recreational shopping is a pretty hollow pleasure, and has the adverse consequence of bringing more unnecessary crap into my life.
    I think these behaviors will stick, because we started before the recession for reasons of our own (it felt like the economy tanked when I cut back on shopping :)

  25. Augiebball says:

    No. The recession era changes will not stick.


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