How is the recession affecting you?

March 10 2009 by Ellen Roseman

There’s a journalistic trend taking flight these days, often called home economics or the new frugality. The media are running daily stories about how to cut back your standard of living to adjust to the ongoing economic slowdown.

One story I like is about women dyeing their hair in the sink and learning to sew, so they can repair their own clothes. “Insourcing” is about doing yourself what you once gladly paid others to do for you.

The Wall Street Journal, which uses the term “crunchonomics” for this kind of story, has written about a new kind of home shopping. Women turn their closets into stores, while coping with problems that traditional retailers encounter, such as possible returns and cleaning up messes.

You can also find appeals to cut back your driving and use shared vehicles. This week, the New York Times magazine featured a long piece about Zipcar, “an upstart company bent on altering the primal bond between Americans and their vehicles.”

I think many people are ready to give up some of the wastefulness they embraced during the economy’s go-go years. They’re gobbling up such stories, even if only for vicarious enjoyment, to get used to the idea of slimming and trimming their household budgets.

While there’s less need to start hacking your expenses if you’re still employed, you still have to be concerned about the diminishment of pensions and personal savings. Also, it’s not cool to spend freely, even if you have the resources to do so.

I’d love to say I’ve started streamlining, but I’m too busy. You wouldn’t believe how many emails I get from people who unearth nasty, expensive, recurring problems while scrutinizing their spending and checking their bills. And I’m getting more requests to speak than I have had in years.

Funny, isn’t it, that you can make a living telling others how to cut back?

3 comments

  1. brad

    Mar 11 2009

    My partner and I are both lucky enough to have jobs that, so far, appear to be recession-proof; in fact, we have more work than we can handle. We’ve always been frugal, so we see no need to adjust our lifestyle.

    The only financial practice I’ve changed to account for the recession is to triple my annual charitable giving. I want to help make up for the shortfall that so many charities are experiencing now.

    My eventual goal is to donate 15% of my annual net income to charity; right now it’s closer to 1%, because I’ve been focusing on socking away money for retirement and paying down the mortgage.

  2. second opinion mike

    Mar 12 2009

    With the ecomony in a downward spin I am seeing more and more people ask the question ‘HOW MUCH AM I PAYING FOR MUTUAL fUNDS AND WHAT AM I GETTING BACK?”. One of the easiest ways to cut costs is to compare some of the low cost fund providers to the current advisor dominated funds. New fund players such as Steadyhand and ING are making a compelling case for people to dump high cost funds and look to leading edge companies who understand the foolishness of paying over 2% for mutual funds.If you are paying for expensive funds but not getting the advise component then you can easily save 1% a year by making the switch.

  3. Bylo

    Mar 12 2009

    > If you are paying for expensive funds but not getting
    > the advise component then you can easily save 1% a
    > year by making the switch.

    Why stop half way when you can get TD eFunds or ETFs for under 0.5%? It’s not as if actively-managed funds have protected investors from the economic downturn any better than index funds.