I don't need to tell any of you that the economy is downright grim these days. The news about unemployment, foreclosures, and tent cities in America (I think this is the one that got to me the most) is pretty depressing.
But not everyone has been directly affected by this economy. Some people still feel pretty secure in their jobs, have little to no debt, an Emergency Savings Fund in place and are in a better position to ride out this storm. Some people are even doing better in this economy. While new car sales are down, car repair shops are doing better (as people choose to repair, rather than replace), and so on....
I drive down the street in my area and see another store that is going out of business, another contracter with too many of their "work vehicles" parked in the middle of the day. I hear that the need at food pantries is at an all-time high because people are out of work because their store closed or contracting business "dried up". I hear on the news about how nobody is spending money.
And the question becomes: are we perpetuating the horrible economy by hoarding our money?
I was saddened to see that one of my favorite bloggers (who probably has no idea who I am) was roundly criticized for sharing that she put a new roof on her home. Meredith is very frugal and most of her site is geared towards using what you have and proving that simple and inexpensive can be just as beautiful. But people felt that she was bragging and that she should be more sensitive to those who have less.
I am by no means an economist. But I have to think that somebody needs to keep the economy going if we are ever going to get out of this. Somebody needs to put the new roof on their home so that the roofer can feed his family. Somebody needs to be going out to eat so that the restaurant owners, waiters, cooks and dishwashers still have an income.
Last week I overheard a group of women at school discussing their upcoming Disney World trips. While my knee-jerk reaction/thought was "this is not the time to be blowing money on Disney", I realized a few hours later that this is exactly the time that those who have the money need to be going to Disney. Too many jobs in Orlando depend on it!
So while I may be very frugal, I also realize that I have a responsbility to those around me. If I give up my Tuesday morning coffee, am I helping to put someone else out of work? If I stop going to Weight Watchers, am I contributing to any financial issues that my Weight Watchers leader is having?
I'm not saying (or encouraging you) to go out and spend money willy-nilly and I certainly am not putting anything on the credit card. But the truth is that we feel very secure that my husband will keep his job (even though the company suspended bonuses this year), this site is now providing some wiggle-room in our budget and we will be debt-free (except the house) and with a good jump on our Emergency Savings Fund as soon as I get off my duff and finish our tax return. I know that others are far worse-off right now, but we seem to be doing fine. Don't we have a responsibility to our fellow human beings to help them get to the same place we are?
I'm just wondering if we are shooting ourself in the collective foot by thinking only of ourselves in this economy. It seems to me that if I have an extra $50 one week, everyone is better off if I spend it at least a portion of it instead of putting it in my sock drawer or the bank.
What do you think? Please feel free to tell me why I am wrong if you disagree. As I said, I am no economist and these are just my gut feelings. Just keep it civil!
kimmiep621
i have to agree with you 100% on this. and i think its wrong that someone wants to trash someone who puts a roof on thier house. they should be happy for her that she could save enough to do so. thats means she's doing things the right way. and if roof wasn't done that could lead to many more issues.
we got our tax check few weeks ago and it was pretty good. we are using most of it to pay our bills and what not but this has given us the oppertunity to go out like we use to and spend that little extra money. like eating out and buying few extras that we missed, and i feel good giving that waiter a bigger tip cause i know he/she really needs it just as bad as we do
Lisa
Great post!
We have been one of the fortunate families that has secure jobs. The only real effect we've felt with the economy is paying a little more for things like groceries. We have an interesting situation in that, despite this poor economy, our personal household economy is better than ever. This is mostly due to the fact that I am working (doing childcare) for the first time in nearly a decade. We went from one income to two - so we finally have a little play in our budget.
We bought a new car last year (got rid of our 11-year-old minivan in favor of a gas-sipping compact sedan - no sense paying tons in gas for myhusband to drive himself to work in a van, right?). This year, we upgraded two of our TVs to HDTVs - we saved up for both purchases and paid cash. We are going to Disney (for the first time!) this June. The trip is piggy-backing on a business trip for my husband so a percentage of our trip will be paid for. Again, we saved and will be paying cash for the trip.
We have a small emergency fund (not big enough, but we are getting there) and very safe * stable jobs. We feel fine that we are spending and helping to keep the economy going.
I think one thing we can all do to help - regardless of the amount of money we are spending - is to try to keep that money local. Try to use as many local businesses as possible to keep people in your community working. We do eat out quite a bit (that's what having 2 working parents will do sometimes) but we try to visit locally owned business. These businesses are the ones who hurt during these times - and some of them are offering great deals to bring in business! I feel fine about bringing home a pizza from a local shop, or taking the kids out for dinner at a local diner. Keep it local!
I am taking time off next year to stay home with just my own children. We will be losing a big portion of our expendable income and will be right back to sticking with the budget and being as frugal as possible. I am glad that this is MY choice and not because I was forced out of a job. We are trying to get ourselves back on a tighter budget, but we always leave a little play in it to treat ourselves from time to time. We'll just treat ourselves locally and feel good about where we are spending our hard-earned dollars.
Nique
Thank you!!! I feel the same way. My man and I make a good living and have the security to go out and do things. We don't have kids and we feel this is a time when we can be a little less tight with our money. We don't put stuff on credit cards and we don't go out every night or anything ridiculous. The government can't fix the problem, it is us making good choices and buying things we can afford and not overspending when we can't. So thank you for being a voice of reason!
Heather
I've started couponing a lot more. Last night, my fiance asked me if I'm turning into one of those 'nutty women' that obsess about saving money. I don't think that I am considering I won't buy something in bulk simply because it's a steal. If it's something we need and I know we'll use it before it goes bad, then yes. I'll consider buying 10 boxes of cereal if I can get them for less than a buck a box! 🙂
For all of his complaints and comments though, he never complains when it comes to check out time. I try to get the bill down by about half or less if possible. He grew up in a family where if you buy something and then don't need it, you keep it. You don't return it. They didn't use coupons or care about if items were on sale or not to save some money. That is completely opposite from how I was raised.
This summer, my son and I are going to grow some vegetables and flowers inside a portable greenhouse that I purchased. I am hoping that just maybe I can convince my son and fiance that eating fresh is actually way better than canned peas and corn (I grew up on frozen and fresh produce and have a hard time accepting that salt laden canned vegetables are really *good* for you).
I plan on buying 3 different types of tomato plants this year and will attempt canning sauce for the first time. While I have cut back on how much I'm spending overall, I am still spending and being a lot smarter about what I do spend.
If you have the funds to get a new roof, siding, your kitchen remodeled, take a vacation, etc I don't see how it's my place to judge anyone. We're fortunate in that my fiance's job is an essential position within our township so the chance that he'll get laid off is pretty much non-existant. I'm a SAHM but I plan on starting a course this year so I can learn job skills and still work at home in the medical field (which seems to be going through it's own ups and downs with the financial crisis but still more stable than some other areas).
pebbles
I experience a little bit of jealousy when I hear of friends planning Disney trips and other wonderful vacations while I am using our tax refund to pay for a much-needed root canal. I suppose I should look at it this way - - at least, I'm giving th endodontist the business. But he's probably using the $ to go to Disney!!! LOL!
Mindi
Oh - I never said don't feel jealous! I SO want to take my children to Disney and we are saving for it now. As soon as we can pay cash for the trip...we're there! (although the Hubs thinks that a new TV should come first. Yeah - right!)
Jennifer Y.
I agree with you, Mindi. I scrimp and save where I can, but there are some areas where we are still spending money (our non-negotiables)--or even spending new money.
For example, I went back to work full-time last year and there are some things I just can't deal with. Just last month, we hired a cleaning service to clean once a month. It wasn't an easy decision. I definitely felt guilty spending the money. But, it takes a huge burden off of me and it's like my own mini "stimulous plan". (Sorry, I know that is SO overused, but I had to:)
Plus, a wise person once said... a cleaning person is cheaper than a divorce!
Heidi @ GGIP
That is unbelievable!! And when your roof needs to be replaced, you can't exactly put it off for a long time lest you cause damage to the rest of your house!
I have seen a lot of jobless construction workers trying to make some money doing handyman jobs. I wish that I could employ them.
Mindi
I also think that she should be held up as an example.
She didn't put it on the credit card...she pulled the money from her Emergency Savings Fund
I assume that she will now work on replenishing her Fund.
She's doing it the right way!
DianeScraps
Because of my husband's impending layoff we are watching our pennies. But he has a few good prospects, and if one works out we will be applying some of our tax refund, and some of his layoff package towards home improvements. I really need to read up on the $1500 energy saving stimulus thing and see if that can work for me too. I need to replace the sliding glass doors to my deck, they are a huge heat leak in my house, and if I can use the stimulus to offset that in the future - great! (maybe that will give me $$ towards replacing my carpet!)
Katie
Here's a link to the energy federal tax credit:
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
Mindi
THANK YOU Katie!
I have the best readers...so willing to help each other!
robin
I save what I can by conserving energy and gasoline and shopping thrift stores, and I make a little writing online, which is a nice little boost to our budget. When I do spend money, I make sure my dollar supports the businesses I want to see survive this down economy- local, family-owned, organic, sustainable, ethical. Target and Walmart have their place, but if we're not careful, they will become our only choices.
I also am careful to keep donating money to charity, even though my instinct is to clamp down on cash. We are still able to contribute to savings each paycycle, we are not in danger of defaulting on our mortgage. We are luckier than many, and I am mindful of that.
So, absolutely, if you need things or if you have planned for them you should buy them. The sea change is that people have stopped buying impulsively, based purely on want.
FFB
I don't think you should brag these days about what you spend on and you have to be sensitive to others situations. But if you have been reasonable with your money and you want to go on vacation then by all means go! My wife got an email from Hotwire listing hot deals - There are amazing bargains out there for travel! If you have been frugal and have decent savings then now is the time to go get those bargains.
You can clean up with all sales and bankruptcies out there.
Look, you have to live within your means. But if that means you still have discretionary income then use it if you feel comfortable with it. In a lot of ways you are correct that if we all stop spending we continue making the economy worse.
(And part of the reason that bank savings interest is so low is because the Fed wants money to be spent rather than saved).
lee
Thanks for saying people should take their orlando trips! I live in orlando and the job crisis is horrible here. Florida has just over 8% unemployment. We relocated here is Sept and it took my husband 6 months to get a job. Orlando needs your business. Disney and Universal, along with all the little restaurants and shops and put put golf needs your pennies to support our community. So thank you to everyone that comes here. BTW in a couple years there will be this huge medical proprety in the south eastern part of orlando including a veterns hospital, childrens hospital, cancer center, and new UCF teaching hospital. So if anyone is in need of medical care you will help support me, a future nurse in Orlando area, although i hope you'll all have healthy vacations!
Jeff
Sock drawer, huh? And what was your home address?
Mindi
LOL! There isn't much there anyway 😉
Maria
This is a great post!
My husband and I feel very lucky that he has a good job that he loves and his company is thriving even in this economy. We like everyone else have to be very careful about how we spend our money. I stay home with the kids and we are paying down our debt, so living within our means is very important. But, I struggle with how much can I spend and what is too much. I recently got my hair done (which I admit I spend way too much money on), and my hairdresser is 8 months pregnant and her doctor told her she should be on bed rest right now (the baby isn't in danger but, she is showing signs of early labor), unfortunately she can not afford to stop working right now. Being a hairdresser doesn't provide her with the luxury of paid time off even for a maternity leave. Does this make me feel better about spending money on my hair right now? Well, kind of but, what I do know for sure is that if I can afford to spend good money getting my haircut and colored I better be able to afford a big generous tip for my pregnant hairstylist.
I will continue to do what I can to save money wherever I can. I am new a couponing and it is really helping our family. But, I am not going to feel guilty about spending money even in times like these. I will be more aware though of who I give my money to now. I am finally able to fix my basement that was flooded right before Christmas and plan on using local contractors instead of doing the work ourselves (not everyone is good at stuff like that).
Noelle
To me, frugal does not mean never spending money on anything. My husband has a good job and my family is financially stable. We live within our means but do not have to sacrifice much. We vacation to Disney twice a year, which many of you would say it unnecessary, but it is what we enjoy. So, because I can afford to spend $ without much thought to cost, should I? Why wouldn't I want to spend $.79 on goldfish vs. $1.79 if I did not take time to clip a coupon. As a stay-at-home-mom who is not bringing in any monetary income, I feel that it is my job to stretch that money as far as it can go. If I save $30 in coupons on my next shopping trip, then I have enough money to take my children to the zoo. And those are the things that are really important.
Leah
wow..i can't believe that someone felt the need to criticize another person for putting a new roof on their house!?!? ugh. at any rate, i completely agree with you...we do have to keep the economy going...at some rate, although i believe savings is extremely important. my husband and i are putting some cash towards a new patio door this summer (a necessity unless we want to spend all our income next winter on our heating bill!!), a new gun (also a necessity!) and then we're taking a trip with our daughter to a town about three hours away to a museum and a zoo!..not a necessity, but guess what? we can afford it, we want to do it so our daughter has that experience..and it IS helping keep people in jobs! i wish someone had the nerve to criticize me for that..i'd let them have it!
Tirade
I disagree. It's not my responsibility, as a consumer, a taxpayer, or a patriot, to "keep the economy going". I was raised frugally and lived frugally even during the "good times". I did not cause the economy to fail, so I certainly do not feel obligated to fix it. The economy has been fueled by cheap credit, overspending, and bad business decisions for years, and the only way it will be restructured in a wise and safe manner is if we let it die instead of desperately trying to prop up the old, failing system with bailouts and shopping sprees.
One of the few good things about this recession is that it is purging a lot of businesses that had been poorly managed for years. Circuit City, major American car companies, and some banks have making terrible, high-risk business decisions for years. Those are the more prominent examples. In my area, there are a few local businesses that have gone under recently that were notorious for their bad customer service, shoddy products, and inept management. I'm not sad to see any of these businesses go. If they didn't fail now, they would have in the next few years. I could have gone on a shopping spree at these failing businesss and it wouldn't have made a drop of difference.
The businesses that have always offered good products, customer service, and are run by management who knows what they are doing are in no danger of closing and going bankrupt. They might not be raking in as much cash as they were a few years ago, but they're certainly not in danger of closing forever. I'll continue spending the same amount of money at these businesses as I was before the current economic crisis.
P.S. I went to the linked blog and could not find the specific entry that generated so much criticism. Did she remove the controversial entry?
Heather
" P.S. I went to the linked blog and could not find the specific entry that generated so much criticism. Did she remove the controversial entry? "
I wondered the same thing. I went to the blog and couldn't find the entry regarding a new roof either. It's terrible that the internet trolls had their fun. 🙁
Mindi
The original post was taken down. There is now a post in it's place (the one I linked to) that says that she didn't mean to upset anyone (with a picture of a roof)
Mindi
Hi Tirade!
Thanks for your comments! It IS nice to hear the other side (seriously)
I want to clarify that I am not talking about "shopping our way out of it" (as we were directed to do in the past)
What I am saying is that I am hearing more and more talking of "hoarding", be it money or groceries...and that can't be good either.
Somewhere in the middle, there has to be a solution!
Tirade
What's that old cliche? "It's nothing personal, just business"? I think that applies to the situations in this described entry as well. It's not your problem or responsibility if the server at the coffee shop gets laid off because you changed your coffee routine. It's not your problem or responsibility if the Weight Watchers leader doesn't make as much money because you decided to cut down. Yes, it's depressing to think about, but if you decide to feel guilty every time you cut back or "hoard", then you're just going to drive yourself miserable and insane.
I own an online retail business. While I appreciate all of the business that I get, the last thing I expect or want is customers to keep supporting me out of guilt, obligation, or sense of responsibility for the state of the economy. That's too close to having an entitlement complex for my comfort. I don't care if people hoard because it is not my place to tell them what to do with their cash.
I don't care even if it does go against my business interests to have this attitude. I'm confident and okay with it because market and society will adapt. A bear market is good way to force out old rubbish (see my previous post) and pave the way for new business opportunities. Your regular coffee shop might go out of business, but maybe a new, better coffee shop will takes its place when the market is on the upswing. Maybe the server who was laid off will find a more lucrative job that didn't exist prior to the downturn. The market will somehow fix itself whether we hoard or not.
Gina
I normally don't comment. However, this is a subject that I am passionate about. I don't think Mindi (or anyone who frequents this frugal blog) would advocate "spending the recession away." The recession is a recession due to excess. Too much credit. Not enough cash.
I am a SAHM. My husband has a good job. We do fine. I coupon to make our money go farther. I also put on a sweater to make the money go farther. I do this as part of my job. I also take my kids for the occassional ice cream treat out. Our family vacations every year. My husband and I vacation by ourselves at least once a year. We do this with cash. We do it because we find it important.
I don't think that it is bragging to tell people what you spend your money on and what you don't. Maybe it is in some contexts...but not these blogs. Seriously. Stop reading if it upsets you. These bloggers deserve to be able to write about what is happening in their lives. Whether it is a new roof. A trip to Disney. Or a Starbucks Latte. I want to rejoice with people when they get to enjoy something they love.
My family tries to spend locally when we can. We bought our paint from a local business when we painted our living room. Why? Because the extra money we spent (which was less than $40 total) wasn't worth to us what the money we spent was worth to the paint store owners.
This is turning out to be a long comment. My point is if you are being responsible with your money in the first place, then don't feel guilty doing thing spending your extra money.
Tonya
Mindi, I am so glad that I found this article! I totally agree with you and many of the people who have commented so far.
We are having flooring put down in our house this summer, and we have just been planning to use Home Depot. Now, I'm going to look into local companies to do the work. I figure flooring is about the same as a new roof (I didn't read that post...flooring just might be worse), but it is something that it is definitely needed to up the value of our house, and we started working toward needing flooring before the economy got bad.
Mindi
FYI: Both Home Depot and Lowes subcontract out the labor to a local contractor. Even if you go to Home Depot, you are helping out the local guy!
HOWEVER, if you go straight to the local guy, you might save money anyway. When we put in hardwood floors, we went to the local guy (who it turned out was on Lowe's "call list" anyway) and he gave us a price that was $1 less per square foot than Lowes (I guess because he didn't have to pay that $1/sq.ft to Lowes)!
Liz
I'm a new follower of this blog, since I just got into couponing a few months ago. I'm a psychiatrist and my husband is a research scientist. Our kids are grown and our circumstances are very comfortable. We really have no money worries, thank God, and we have always been conservative spenders, saving a healthy chunk of our income every year for the past 30 years.
Nevertheless, I decided to trim our grocery budget. We buy humanely raised, local, grass-fed meat and poultry only. Only sustainably caught or farmed fish. A lot of organic and/or local produce. Now I'll be switching to recycled paper goods, since I've learned that they cut old growth trees to make the soft stuff. Can you believe it? For toilet paper?
All this added up to a whopping grocery bill last year. (Dare I say $10000 for just the 2 of us?) I want to go on buying the good stuff, that I can square with my moral beliefs. But do I also have to pay top dollar for deodorant?
I've wrestled with this moral issue for 3 months now, but I've concluded that overspending just to keep the economy rolling makes no sense. I'll go on buying the $.19 lotion and, after I have enough for me, I'll donate extras to the women's shelter. I'll help make sure the organic farmers survive the downturn, and the people who really need and can't afford will get. It seems like a win-win to me. And I'll still be doing better than last year with my grocery budget.
Celia
I think someone has a screw loose when they complain about blog content. You are a guest on someone's blog. It is theirs- for their thoughts and feelings. If you don't like it there are abundant blogs out there.
As far as the money spending in tough times.... My husband and I just spent almost six grand moving and fixing up our home. We have budgeted for between 100-300 dollars each month going forward on things we will be doing to improve our home. We live carefully and I am proud to have the cash in hand to pay for these things.
I DO NOT feel that I should spend money to try and "stimulate the economy". However- I am more careful WHERE we spend our money. I needed flowers as a thank you and instead of going through 1 800 Flowers like I have done in the past I drove into town to be certain the money was spent as locally as possible. That way my florist could get all the money since 1 800 Flowers probably only gives them a percentage. Instead of going to chains we are going to family restaurants on our street. We are budgeting one major home project a year and we are going to use as close to home companies as possible.
Furthermore- I feel that if CEO's want their companies to do better than they should cut costs wisely- starting with their salaries. Because if they deserved millions their companies would be in better shape.
The economy is in this condition because people wanted something for nothing. I am hopeful this is the start of a change toward a more responsible country and world.
Jacquelyn Cox
Great points in this post Mindi. I feel the same way. Thanks for sharing!
Jennifer
We feel very secure in dh's job as well. We have no debt except our mortgage. We need a larger EF, yes. We are saving as fast as we can for a new van and hope to buy one before the end of the year. We are also saving for a new roof and a vacation to the beach. On the one hand we need to be saving more money, but on the other hand, I don't feel so guilty going out to eat in my town. I don't want the restaurants to close. I am not going to spend like crazy, we stay within our budget, but I guess I am just not trying to cut everywhere I could cut so that maybe some of what we spend money on will help others right now. I have never felt like this before, so it is weird.
Betty
I agree with you 100%. My family has been through hell the past past year because of this recession. We own a mortgage company and it has been extremely difficult. Luckily we had saved in case this happened. We somehow survived last year by scrimping, really scrimping, selling off excess things we didn't need, and just holding on the best we could. We are finally getting busier again and have money coming in. We still have expenses that are daunting, but our savings are still good. We have decided that after everything we have been through, we need a vacation. I feel a little weird about it because I am still a bit shell shocked with everything that happened and am a bit afraid to spend money. At the same time, I partially feel like I am doing my duty for our country because you are right, people have to start spending if we are going to get out of this. A lot of companies have gone out of business and consumption is way down, but people have really tightened up in an extreme way. People are still scared to spend anything. If you do have any extra funds, you shouldn't feel bad about spending. Actually, I think you should feel good about it. It does help others stay in business. When I do refinances for people and help them lower their payments, I am not only proud of helping them, but I know that money will end up being spent and help our economy. People should not rely on credit cards and should use these lessons we have all learned over the last 2 years to show the importance of savings, but we can't be paralyzed by it either.
Jen@Balancing Beauty and Bedlam
Wow - I bet you never thought that your little post would open up so many varying opinions. 🙂
As a SAHM of five, with a husband who is out of work (since we decided not to move with the company), I am thankful that we had the EF up and running so that panic hasn't set in...
much to say on this subject, but I'll let everyone else take over for you. 🙂