Right now most people are worried about their jobs. Some have already lost their jobs, some have taken paycuts instead of a job loss. The state of our jobs are precarious at best. The truth is most of us are feeling vulnerable and scard of what might happen. Of the “what ifs”.
So is now the time to start living leaner? The question is, if you have a job, emergency fund, and are still saving, should you be cutting all your expenses now in preparation for the what if?
I think not necessarily. I think that right now would be a great time for people to bulk up their cash savings. But at the same time, not deprive themselves from living life. Instead of cutting cable, gym, internet, phone, car, etc. Perhaps carefully consider all large purchses or luxuries and ask yourself if you really want it?
Perhaps you start cooking more at home to stash a few extra bucks. Or start bring lunch to work 1-2x/week instead of never. Perhaps instead of taking a luxurious vacation abroad, you stay within the US. Or you put off purchasing the new car you budgeted for because the one you have still runs great.
On a smaller scale, you can go out to eat less but cook fancier foods at home. Do more home repairs to fill the time on the weekends, instead of hiring out. I think that depriving yourself right now when times are bad can lead to more negative thinking.
That’s not to say you should cut everything if you lost your job or took a paycut. But if things are going okay for your family, perhaps it’s okay to just continue living your normal life. That trimming a few expenses is wise, but not going overboard with negativity is the way to go.
What do you think? Are you living leaner and making cuts to your lifestyle even if you haven’t lost a job or taken a paycut? Or have you just been more conscious about your spending?
6 responses so far ↓
1 JoeP // May 22, 2009 at 10:12 am
This has come up before. There is a natural tendency to spend more when things are good, and then cut back when they aren’t. I’ve often wondered how better off people would be if they had tightened the belt during good times in preparation for bad, but this could be harmful to our economy; businesses would have to find ways to extract money from these folks.
We’ve definitely cut back here and there, and will likely keep our current spending habits going forward.
2 Meg from FruWiki // May 22, 2009 at 1:52 pm
The way I see it, there’s never a bad time to be frugal and you shouldn’t wait until hard times to start cutting back.
I don’t think most people have to feel deprived in order to save money. There are many pain-free ways to save and a lot of cheap/free ways to enjoy oneself. Sometimes people just get into spending habits and need to reexamine what they’re spending on and why — and what they could do instead for less.
Still, if you don’t have have a substantial emergency fund, it may be time to make some real sacrifices. Not only will you be able to grow your savings and feel more secure, you’ll also be practicing for rough times ahead — and almost everyone is going to have some financial rough spots to get through.
3 LAL // May 22, 2009 at 10:07 pm
Interesting Meg and JoeP. I think that it really depends on the situation.
4 JoeP // May 26, 2009 at 8:55 am
Meg, I completely agree with your post. People don’t think of emergency funds when things are good! Instead, they think of spending.
5 LAL // May 26, 2009 at 9:09 am
Perhaps because when times are good, you feel more job security. But when times are down, there isn’t any.
6 Chris // May 31, 2009 at 4:16 pm
I hate to say it, but the only time I go out for nice dinners anymore is when a vendor is paying for it. Figure they budget for the “entertainment” anyway so might as well take advantage of it.
It is amazing how frugal you can be when you don’t have to pay for the luxuries in life…
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