Comments on: Your Take: Will Your Recession Changes Stick?

By: Deby

Deby — Wed, 11 Nov 2009 00:28:33 +0000

I’ve rediscovered the local library. I admit it’s much easier now that they’ve gone online, just order the books I want and in a couple of days (for older books, new ones can take longer since they’re in more demand) they’re ready. I’m giving up my Barnes & Noble card, and I don’t think I’ll miss it.

But if overtime ever comes back for me again, I’ll be making an appointment with my hairdresser to color my hair again!

~Deby

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Tue, 10 Nov 2009 19:22:17 +0000

Just a guess, but some changes will stick because the rules of the game have changed. It’s not likely that we’ll see the easy credit standards of the 90s and early 2000s back any time soon and that will make a lot of spending changes permanent.

So much of the pre-recession excess was being paid for by home equity lines of credit for everybody and the mailbox full of fresh credit cards, and it’s absence will put a short leash on a lot of us.

By: Jill

Jill — Mon, 09 Nov 2009 20:24:57 +0000

I have not changed my habits much because I have not been personally impacted much. However, I think that some things will stick. There has been a push towards better financial education that I hope will stick around. I also think savings rates will stay higher, especially as long as credit markets stay tight.

By: Wilma

Wilma — Mon, 09 Nov 2009 19:14:59 +0000

I’ve always lived frugally. So I’m not in any real financial trouble at this point. Finding new ways or experimenting with new ways to cut back on utility usage, food bills etc keeps things interesting and me on the frugality track. I listen to those that have no concept of what it is to cut back in one area to get something in another area of your life. Purchases (especially big ones) must be planned. Some times sacrifices must be made. Hopefully going forward those that got into hot water will learn to spend more wisely.

By: Patrick

Patrick — Mon, 09 Nov 2009 14:31:06 +0000

I’ve also cut down on eating out at restaurants with my finacee. It just got so expensive and we have a nicer time making dinner together. As you said Jim, it’s also much healthier as well. All the ingredients we put in are fresh and we use more whole grains as well.

By: kitty

kitty — Sun, 08 Nov 2009 00:35:16 +0000

No. I am fortunate that I have sufficient income and savings that I don’t really need to cut my spending. I am also older (50) and so my net worth is higher than that of most younger people here. I also have no debt, I own my home outright. As a result, I have about half of my net income left after expenses, including full credit card bill and max 401K contribution. But I’ve never been a huge spender, at least not by American standards. I drive a Honda Civic that I bought new for cash, I bring my lunch to work – I prefer my cooking, plus eating out or buying lunch at work seems like a bit of wasted money for me. I’d rather spend on things I like more.

Some savings did happen for family reasons – my mother is seriously ill so I had no vacation this year — I took days off, but I stayed at home taking care of family matters. I did take nice vacation last year – a transatlantic cruise, so it’s fine to skip this year. For the same personal reasons I skipped on my usual trips to Metropolitan opera or even Met HD Broadcasts. I just really have no time. Not much time for shopping either, really.

I also gain a bit of weight and when this happen I usually go to “no new clothes until I loose weight” mode. So some savings there as well.

Aside from that I see no need to change my lifestyle. If I lose my job, than I’ll cut a few things, even though I can survive on my savings for quite a while, so I see no need to cut expenses now. In fact, if I could find a cleaning lady I could trust, I’d probably hire her. Time is at a premium these days.

By: Augiebball

Augiebball — Sat, 07 Nov 2009 20:34:41 +0000

No. The recession era changes will not stick.

By: Rosa Rugosa

Rosa Rugosa — Sat, 07 Nov 2009 03:00:20 +0000

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

By: Rosa Rugosa

Rosa Rugosa — Sat, 07 Nov 2009 02:52:05 +0000

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.

By: AmandaDRowe

AmandaDRowe — Fri, 06 Nov 2009 23:34:34 +0000

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.

By: saladdin

saladdin — Fri, 06 Nov 2009 22:59:33 +0000

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

By: saladdin

saladdin — Fri, 06 Nov 2009 22:56:23 +0000

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.

By: centsandthecity

centsandthecity — Fri, 06 Nov 2009 22:39:36 +0000

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

By: Gates VP

Gates VP — Fri, 06 Nov 2009 22:15:11 +0000

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.

By: Gates VP

Gates VP — Fri, 06 Nov 2009 22:10:51 +0000

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.