No End In Sight To A Thrifty Consumer
*Nothing spectacularly new from Page 1, but a nice repeat of the declining Consumer spending and the mixed blessing of increasing savings rate.
Recently in Downsize the McSize Category
Borders 40% off a single item coupon. Good for only this weekend and inside the stores. That's a real good deal! Saving money in these uncertain times is always prudent.
The Unemployed Couple
CHRIS STRONG FOR TIME
Barbara, 46, and Kevin Lowe, 52, Grand Rapids, Mich.
The cell phones were canceled; so were all subscriptions and outside entertainment. We didn't go skiing this winter, and we won't be golfing over the summer. No more wine. We used our severance and some savings to pay off Kevin's 2008 Saturn and pay down the house. We debated whether to cancel the local newspaper, but in the end kept it for the Sunday coupons. We now eat every single item in the house until it's gone. If that means we have curly pasta and penne and spaghetti all mixed up, so be it. I have 101 ways to use half-eaten boxes of pasta. We're much more careful shopping -- no more running in to get one or two things. We wait until we have a big list, and then buy only what's on that list -- and at the local grocery warehouse, not the food boutique.
This is the face of the new modest consumer. (Time)
Conspicuous spending is yesterday's fashion. Modesty is the new trend. CNNMONEY
Related to that is our personal savings rate. As unbelievable as it sounds, the United States used to be a nation of savers. The 80's through the 00's brought in a culture of greed and excess. Thanks to easy access to credit, some people spent more money than they made. This helped to exacerbate our Great Recession. Unsurprising.
What's surprising is that Americans are once again a nation of savers The most recent personal savings rate is about 3%. That's better than -2%. Instead of dipping into credit cards and buying luxury items, Americans are being reasonable with their spending, buying things they can only afford.
Imagine that concept, buying only what you can afford. Modesty can be a mixed blessing in a time of recession, but I'll take reasonable spending over excessive spending any day.
- The Economist would say it's too soon to say the increasing savings rate will be permanent.
- The Gambler would wager this is a real culture shift. Luxury items are like cardigan sweaters. Who still buys them?
- The Investor is still afraid.
