Frugality continues to grow as the best choice:

**Ceashels** · 05-04-2010, 02:33 PM

Frugality among consumers is outliving recession - Yahoo! Finance

Even as the economic recovery plods ahead, many American consumers are refusing to come along.

They're not spending freely -- and they have no plans to.

Many of them have steady income. They aren't saddled by high debts. They don't fear losing their jobs. Yet despite recent gains, they've lost so much household wealth that they're far more cautious about spending than before the recession.

Their behavior suggests that the Great Recession may have bred a new frugality that will endure well into the recovery. And because consumers fuel about 70 percent of the economy, their tightfisted habits means the rebound could stay unusually sluggish.

That's the picture that emerges from an Associated Press survey of leading economists and interviews with more than two dozen ordinary Americans. The new AP Economy Survey asked 44 leading economists whether the recession created a "new frugality" among consumers that will outlive the recession. Two-thirds said yes.

I was a little sad to read that though savings hit 6.4 % last year, it has already dropped to 3.1% now that the economy is plodding along.

**frugalfranny** · 05-04-2010, 02:47 PM

But I think there are a lot of other factors in play here.

An 'interview with two dozen Americans' does not a believer make....for me anyway. I would have lots of questions.......where were these people from? as different parts of the country are in different stages of recovery... what was their income b/4 the bust? how much did they loose and why.......outside of house value. And a 'steady income' today does not mean that you will have it a month from now.

I am sure that the news in our area will be saying we are 'recovering' as they see more consumer spending starting, home sales are up............WELL, DUH!!! It is summer.....we do spend more in the summer, people MOVE and buy in the summer. We have been cooped up in our homes with weather for the last five!!!

I am giving less and less credit to what is reported on the news as I am to what I SEE in my own area.

**Telephus44** · 05-04-2010, 04:09 PM

I agree. I feel that there is a lot larger disconnect with the economic news that is reported now-a-days than with what I observe in my own life and people around me.

**Imarachne** · 05-04-2010, 05:51 PM

I wonder if we have even hit bottom yet !

**Michelle68** · 05-04-2010, 08:52 PM

The conclusion this article seems to reach about this "new frugality" seems to be very negative. Almost as if frugality= bad economy and spending=good economy.

**frugalfranny** · 05-05-2010, 12:43 AM

Originally Posted by Imarachne

I wonder if we have even hit bottom yet !

I have wondered that too imarachne but I think we are there. I just think that it will take a real long time for recovery.......and I am talking YEARS.

I think for most people this was a real shocker, even for the ones that didn't lose their homes. Can't imagine what it did 'mentally' to the ones that lost their homes...........while thinking that they had a secure job, would retire, blah.....blah....blah.......or even the ones that had to take a pay cut to keep their jobs. That hurts at any time!

**mndtrp** · 05-05-2010, 01:19 AM

Originally Posted by Michelle68

The conclusion this article seems to reach about this "new frugality" seems to be very negative. Almost as if frugality= bad economy and spending=good economy.

Isn't that technically accurate? Not spending money isn't good for the economy.

**pollypurebred39** · 05-05-2010, 01:43 AM

I know The Great Recession certainly has had a great impact on my feeling secure. I always was frugal, however I never did those deep cuts in budget like making my own laundry soap, cleaning solutions, food budget ect.

I know that we will never have cable again, spend as freely on food or purchase a car or anything else without having saved for it first. Our stockpile will be enormous, I'm thinking years. Every spare dime will be socked away. I'm learning how to garden and can, I'm learning how to sew, we're learning how to do things ourselves instead of calling in repair guys. Once you walk through the fire of recession you're kind of afraid of getting burned again. I don't think we'll ever be able to feel like we've done enough and can rest easy ever again. So no, we won't be good citizens and do our part by spending to boost the economy, this article is dead on accurate for our family.

**Greebo** · 05-05-2010, 09:12 AM

Originally Posted by mndtrp

Isn't that technically accurate? Not spending money isn't good for the economy.

True, but spending money you don't have is only good for the economy in the short term, as many people have found out the hard way - and as eventually everyone finds out.

**krbshappy71** · 05-05-2010, 09:54 AM

hahahahaa, all I can picture is someone sick with a hangover and swearing off drinking. "I'll never drink again!! NEVER, I SAY!!"

Uh huh, right. And after each Christmas how many times have each of these people claimed they wont do THAT again either? But then Christmas rolls around again. Then there's the people who lose a ton of weight and say "I've changed my lifestyle, I wont gain it back THIS time, I've really changed!"

Sorry the entire article screamed, "yah right".

**pollypurebred39** · 05-05-2010, 10:33 AM

krbshappy,

Yes, I can see where that would happen to some. I guess it's all a matter as to what your thought process is about money in the first place and if you lost your home, job, savings, or retirement in this mess. I'm hoping that people have a lesson learned mentality, but if you're someone whose not happy unless your spending I can see how they could fall back into old spending patterns. We just never had that mentality in the first place and after almost 3 years of being under employeed and running through our stockpile, our EF, our savings, and most of our retirement with no hope of returning to previous employment until late 2012 (according to DH's employer) we know that what we did to secure ourselves through hard times was not near enough. The thing is though, what is enough? and will we ever feel like we can breathe easy again? I have serious doubts of that ever being the case. We, like I suspect many others have been mentally wounded beyond healing, and life will never be "normal" again, we will always and forever be waiting for the shoe to drop.

**krbshappy71** · 05-05-2010, 10:38 AM

Oh and just for the record, my own habits probably have not changed for long-term. Its a moment to moment struggle. Perhaps that's why I had that reaction towards the article, too.

**pollypurebred39** · 05-05-2010, 10:46 AM

I understand that without question. I have certain moments where I'm grating soap to make up a batch of laundry soap and I'm day dreaming about buying tide. LOL! It is an up hill battle to change thought patterns about money and spending.

**Preston** · 05-05-2010, 12:44 PM

If it matters, we have loosened up a little, but also has to do with not having a ton of credit card debt hanging over our head, and we also decided that although we still have consumer debt, it is more important to actually be able to enjoy life a little now.

Do we still save? YES. Are we still reducing debt? YES. The difference now is that we are able to live a little, and this has reduced stress and overall improved our quality of life.

**pollypurebred39** · 05-05-2010, 01:12 PM

krbshappy, I just reread my post. When I wrote:

I'm hoping that people have a lesson learned mentality, but if you're someone whose not happy unless your spending I can see how they could fall back into old spending patterns.

I was NOT saying you were not happy unless spending money, I meant consumers in general. I do apologize. I never meant in any way shape or form to be rude. Please forgive my blunder.