New frugality is the new normal, by necessity

CHICAGO

 

This article is approximately 35 paragraphs longer that the average OT reader's attention span.

 

Honestly, though, I think that it's a good thing. Americans have had a negative saving pattern (ie, they've been incurring debt faster than savings) for quite a while. The country has built an economy around excess and, when people realize they don't need or even really want a bunch of stuff, it self-corrects.

It sucks for people losing their jobs and it's tough on the country but ultimately, it should lead to a more stable economy as well.

Of course, the cycle WILL repeat again over the next few decades and the country will go back to wretched excess.

 

The change in spending/saving habits isn't due solely to the economy, it's been happening for quite a while.

I own a mortgage company and for the past 3-4 years we've seen a very big change in debt loads and savings. For the longest we saw people, especially young ones, spend, spend, spend but 3-4 years ago they started getting in trouble with their spending habits and started trying to work their way out of the hole.

It has become a rare thing for us to see people massively overloaded in debt. People have been paying debt down and working on paying cash for more things. This of course leads to increased cash on hand.

I think the economy might have sped things up a little more or maybe it's just that the media has finally noticed it.