The economic recession is bringing us many financial headaches, but there’s a silver lining: frugality is back in fashion, and we’re once more learning to conserve.
“Retail sales are plunging….” That is the banner today for many financial publications, both on the Web and on paper. I say to this, great news, excellent news! I am glad that common sense has finally prevailed. We have been on a binge of gluttony since the 1990’s. Every year the increase in consumers’ spending fed the frenzy of financial institutions. Any momentary decrease in spending was considered anathema. It took a big tsunami of credit failures and credit card defaults to awaken our conscience and to make us change our ways.
Frugality Is Back In Fashion!
So the average 6-pack Joe, as beautiful Sara Palin would say, has decided that he would cut down to 3 beers (a week or a day?), that taking the family to Disneyland and other plastic attractions was really not that important, that the wife could afford to go another year without her 20 handbags and 40 pairs of shoes, and that it was time to cut on expenses. Imagine that! (stolen verbatim from Lou Dobbs 😉 ).
I am sure that wealthy Americans have better things to do than bemoan my middle-class articles, so I’ll concentrate on Obama’s favorite target, you, me and 90% of Americans who wonder whence (stolen verbatim from Shakespeare) their next paycheck will come from or whether their present income will be sufficient to cover their expenses.
Basic Money Tips For The Economic Recession
Well, if you have a steady income in times of economic crisis, consider yourself lucky; and unless you are about to retire, leave your 401k’s alone. They’ll grow back eventually. Do not forget, however, that since there is no guarantee in this life except Death and mosquito bites, you absolutely must prepare your budget for any possible calamity. The following pieces of advice are from an old guy who went through devaluations and recessions in various parts of the world (I’m a Great Depression heir and I made it).
1. Rein in your husband or wife if he/she is a careless spender. Last Sunday we (my better half and I) went to a local waterhole. It was packed. While we shared a dish so as not to spend more than $20, many of our commensals (another big word I stole from Mr. Webster) were happily stacking orders around the table.
2. Visit the local One Dollar Store. Around our town, there are several stores with the name “Dollar” on the front door. A couple of them even guarantee “nothing over $1.” Most of them offer a bunch of cheap stuff that may serve some purpose, such as cleaning products, tools, and even food. If you have these stores in your area, don’t be too proud to be seen there if you can save a few bucks.
3. Befriend your local banker. Don’t be afraid to deposit money in your local bank; it is insured up to $100,000 (If you have more than that in cash, offer me a job).
4. Rejoice in the cheaper stuff. The good part of this particular economic recession is that many things are cheaper, including gasoline. Many things will cost less, unless inflation hits us simultaneously (knock on wood that this won’t happen). I am paying $2.50 for a gallon of gas in Texas, and that sure helps the family budget. 5 years ago, I never thought that $2.50 a gallon would look good! Many other products are coming down, such as produce and meat. I went through a stagflation (inflation with recession) and rest assured that this recession is nothing of the kind.
5. Check your budget with Sherlock Holmes’ magnifying glass. There are so many areas in which you can save. Money drains abound while every penny counts. Act as if you were living in Baghdad. Count your blessings before cursing the government.
6. Maintain a positive attitude, above all. Out of every crisis come opportunities; it may be cheap stocks of good companies, the house of your dreams at an affordable price, or even the chance to start your own business.
Hang In There
Do not give up just because you’ve lost your job or your house. Believe me, I’ve lost my job several times before. And every time, I ended up discovering a new venue… a new opportunity. This will also forge stronger bonds with your loved ones (in good times and in bad times, remember?). So get up and live to fight another day.
Yes, saving money is in! For more on the shift to frugal living, check out this article on how you can go on a recession diet.