Warren Buffett said this week that he has never seen the American consumer modify behavior so quickly in terms of spending. I would have to agree. I have often wondered if is possible for the American public to put off their buying? Could they actually delay their gratification? How long can they do this? How else will we modify our behavior? What if the economy gets worse? What else can be cut out?
One of my favorite Saturday Night Live skits was called "Don't Buy Stuff That You Can't Afford." (Click on link to view) It included a person giving financial advice. "So what you are saying is that if I can't afford it, I shouldn't buy it?" This was the joke. It sounded so crazy back in 2006 because all we were doing as consumers was buying and then more buying. They really should rerun the skit because it would really hit home for millions of people. It is a lesson that we are all learning.
I was talking to a relative this week and she was really struggling with how they were going to get out of debt some day. I went back to my SNL skit. Don't buy what you really can't afford. Keep your cars longer. Don't eat out so much. Spend less time in stores. Cash only. The "new" usual.
This week I had to spend a little money for my son's birthday. I feel fortunate to be able to throw him a birthday party and know that there are a lot of mothers that are making much more difficult choices regarding where to spend their money. I thought about how different I approached it this year. The kids will still get small goody bags but I used coupons at both places I shopped. I even used a competitor's coupon at a craft store for the first time. Usually I wouldn't bother since it was a small purchase or I would think it wasn't worth the trouble. I saved a dollar and was pretty proud of myself when I walked out. I will also put one less item in each goody bag and that saved me $14 ($1 per item per kid). I will only pay cash for his birthday gifts and he won't get more than a couple. Small changes for my family in this area but if we are all cutting back in various aspects, that impacts businesses large and small.
So yes, Mr. Buffett, people are changing their ways. We aren't eating out much anymore. Shopping for clothing is for necessities only. Usually this is for the children. Meals are better planned. Leftovers are all eaten. Coupons are used. Prices on items are compared. Trips to stores are less frequent. We spend more time at home or looking for inexpensive options. We use our memberships to local museums more often. We are repairing paid off vehicles instead of buying new. We buy less for holidays and birthdays. We only pay with cash and we are paying off we owe. So in the end, isn't this what we were supposed to be doing all along? I just hope that our new attempts at saving will turn into habits when the recession is nothing but a memory and a page in the history books.
The Open Road
4 years ago