Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Friday, July 30, 2010

Some Are Changing Their Ways. Are You?

The recent economic crisis has been dubbed “The Great Recession”, since it has been the worst recession since “The Great Depression”. We have often thought that a crisis such as this would likely lead individuals to significantly modify their lifestyles, in some cases adopting the simpler lifestyles of the past. We’ve recently wrote about this in our blog posted May 13th, titled “Is Simplicity the Answer?”

There is now evidence that “The Great Recession” has indeed caused significant changes in consumers’ spending habits. A study titled “The 2010 American Pantry Study by Deloitte KnowledgeCo LLC and Harrison Group, discusses the changes seen in how Americans are now shopping. “The Great Recession", economists believe, started in late 2007, but according to the study, actually began in the summer of 2006.

Consumers have, according to the study, become “resourceful” and “precise”. They are using every tool and idea they can to cope with the economic crisis. This includes, according to the study: “coupons, loyalty cards, meal planning, shopping lists, delayed gratification, lowered standards (although not as often as one might think), brand switching, channel switching, store switching, cooking more, eating out less, buying fewer prepared meals, clarifying want versus need, reassessing convenience, larger packages, smaller packages, and more.”

The study showed that the vast majority of Americans, have made changes such as these in their spending habits, plan to continue their new methods when the economy improves and are gaining satisfaction from the sense of being more resourceful.

It seems to us that it is likely these changes in spending habits may, in part, be a factor in the slow recovery we are experiencing in the economy. Some economists are actually worried about deflation. Could the change in spending habits move us in this direction?

Clearly, “The Great Recession” is the most severe many of us have ever experienced. For many, to see their home drop substantially in value and for those who have lost their jobs and their homes, it has been a nightmare. Optimists that we are, we look for the “silver lining”. It appears that many are returning to simpler lifestyles and adopting better money habits. This is good for them and good for our country. If you haven’t made any changes in how you manage your money, we recommend you give it serious consideration. You might even find that being more penny-wise can be fun!


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