As a person who is interested in becoming more thrifty so that I may one day quit my job and fulfill my dream of being a stay-at-home mom, I have been wondering lately, when this recession is over, will people go back to their old ways, or will the changes made in these hard times actually become habits when there is once again enough money to choose to be frugal or not?
While driving in the car yesterday, I heard a piece on NPR, “Economic Downturn Signals a New Normal.” The author, Robert Seigel, seemed to think that Americans indeed are changing their behaviors permanently. He interviewed Harvard economist Kenneth Rogoff who stated that the economy has “had a heart attack.” I like that analogy. Many heart attacks are brought on by unhealthy, excessive living. Isn’t that also true with our own personal economy?
Yes, people lose their jobs and find themselves in dire straits. I have not lost my job in this economy, but in the 1980s, my dad did, and he was unemployed for a long time. Times were very tight. I remember when our church brought us a food basket for Thanksgiving. I was so excited to see so much food! My mom told me when I was older that the only reason my parents didn’t lose their house was because her brothers and sisters chipped in to help make the payments. We never had an excessive lifestyle, but we suffered terribly. I am not talking about these people.
When I mention the unhealthy lifestyle of our personal economy, I am talking about those of us who find the deluxe cable package a “necessity.” People who spend the majority, or all, of their pay check and never save for a rainy day. Rogoff went on to say that 20 or 25 years ago people used to save 10% of their income. Those days are long gone. But maybe now that we have suffered so as a nation during this economic downturn, things will change. Maybe we will save more and prepare for the inevitable down turns in the economy.
In the interview, Seigel quotes Treasury Secretary Timothy Geithner in a Meet the Press interview as saying about the new normal this economy is creating, “When we get through this, people will care less about what they make, more about what they do, what they achieve with what they make and that will help make this country stronger.”
What do you think? Will Americans make long term changes? Do you think you will continue to try to be thrifty when the times are once again good?