According to The New York Times, a subset of Americans—the seriously frugal—are enjoying the current recession because it validates their beliefs and lifestyle choices.
The paper profiles a real estate investor in Cincinnati who borrows movies from the library instead of renting them, and grows her own fruits and vegetables, and avoids the cash advance. Another person profiled by the Times canceled the family’s subscription to Netflix, his premium cable package and a wine club membership.
Here’s the important news in all this:
Americans’ spending is down and their personal savings are up — sharply. The savings rate in the United States, which had fallen steadily since the early 1980s, dropped to less than 1 percent in August of 2008. It has since spiked to 5 percent.
“It’s huge,” said Martha Olney, an economics professor at the University of California, Berkeley, who specializes in the Great Depression, consumerism and indebtedness. The rapid reversal is even more remarkable, she said, because in recessions consumers usually save less money. Not this time. “It implies a re-emergence of thrift as a value,” she said.
The Times notes that there are dozens of Web sites and blogs devoted to celebrating conspicuous cutting, like Dollar Stretcher (www.stretcher.com), All Things Frugal (allthingsfrugal.com), Frugal Mom (www.frugalmom.net), and on and on. Yes, it’s a topic for our time. No doubt about that.
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I think it is great that the US savings rate is up but it should have never dropped as low as it did. I am also glad that blogs that deal with frugality seem to be getting more exposure these days. Let’s hope that more and more people will set up a budget, live by it, and start saving more and more. This will not only be good for the individuals doing it but also for the country as a whole.