Bad News

It seems recently that frugality has become the new black.  People are restraining their frivolous tendencies, opting instead to find ways to pinch pennies and begin saving.

There has been a recent decline in consumer spending.  More people are looking for ways to trim their budgets.  Consumers are being more cautious with their money.  It would seem that the ways of gluttonous consumption are of yesteryear.  While it may be true that these changes to consumer habits are taking place, they are not to be permanent alterations to our way of life.  Our desire to spend cannot be detained.

A recent article from MSN Money discusses the spending habits of the average American as a result of the recession.  The article explains that while there have been changes in our spending patterns, these changes are not permanent.  I found this to be an interesting statistic: 

Of those spending less, about 45% said they saw their newfound thrift as temporary and planned to recapture their old lifestyles once the economy improved.”

This is despite the fact that 1/3 of Americans don’t have any savings outside of a retirement plan.  At least we are saving for retirement, right?  The survey found:

A full one-third had not saved anything in the past year for retirement either.”

I guess we aren’t adequately planning for retirement either.  So we aren’t saving outside of a retirement fund, we aren’t saving in a retirement fund, so we must be paying our bills every month.

One in four had paid at least one bill late in the past year”

Guess I was wrong again.  Despite all of these things; no savings, no retirement planning, and our inability to pay our bills on time, once this economy recovers we are going to go back to our spendthrift way of life?  What about our personal economy?  It shouldn’t matter what the economic situation of our country is if you can’t get your household economy in order, and to use that as justification to ignore your financial instabilities is absurd.

In January of this year, the average American was saving negative 0.7%.  Wait…what?  Yes, you read that correctly.  Americans were actually spending more than they earned, which resulted in a negative savings rate.  At that time we found ourselves squarely in the midst of this “economic crisis”, yet we still managed to spend more than we earned.  Is that what we consider “thrift”?

It doesn’t come as any surprise that we have people living in tents.  We have been riding the crest of financial prosperity for far too long.  Little did we realize that that wave would eventually come crashing down against the shore, leaving us high and dry.  Maybe we should have prepared ourselves a little better.  We should have learned our lesson through all of this, but obviously we haven’t.

As American consumers it seems as though we have a complete inability to know when enough is enough.  We don’t know how to say no.  We behave like starving beasts, never able to satiate our desire for more, more, more.  I had hopes that this would be our opportunity to find our priorities in life, to focus on what matters in life but it seems I was being a bit too optimistic in my vision.  I guess that won’t happen until they take away something Americans really care about, maybe our television.