6 Upsides of the Down Economy

by Jeff Yeager on 27 June 2009 5 comments

My father-in-law had a saying: "If you don't have a good time, you usually learn a good lesson." I'm reminded of that a lot these days during the current economic recession.

I'm not saying that the economic downturn is a good thing, particularly for people who have lost jobs or their homes. But fortunately that's not most Americans. For the rest of us, some involuntary belt tightening might have some silver linings. In other words, I think the current market corrections we're going through might just trigger some long overdue — and ultimately very positive — lifestyle corrections for many Americans.

Consider:

We're borrowing less and putting more into savings

We've truly learned a lesson — albeit the hard way — about living beyond our means. In 2008, savings rates rose to 1.7%, coming off the lowest savings rates since the Great Depression. And figures recently released for April 2009 are even more impressive, showing the personal savings rate for the month at a 14-year-high of 5.7%.

We're wasting less

AKA Using it up, making it last, doing without. This is clear from the increase in thrift store and re-sale store sales. Goodwill Store revenues in February were up 7.2% over last year, and for the first time in generations, many thrift stores are selling their wares faster than additional merchandise is being donated.

We're building smaller homes

It's bad for your bank account and bad for the environment to construct, heat, cool, electrify, decorate, maintain and pay taxes and insurance on unnecessary square footage. For the first time in more than 10 years, the average size of new homes being built dropped by nearly 300 square feet, or 11%. Studies show that we, as humans, are inherently uncomfortable living in too large of spaces, and the recent economy has shown that we're definitely uncomfortable trying to pay for them. In with "Not So Big" and "Little Boxes"!

We're driving less and staying around home more

When gas was at $4 a gallon, two-thirds of Americans said they changed their habits and drove less...and nothing awful happened because of it. It save resources, generates less pollution, and, because we're spending more time closer to home, it stands to bring our families and communities closer together. That's why I still continue to pay $4 a gallon at the pump, or, rather, pay myself the difference in my "$4 a Gallon Savings Club."

We're eating lower on the food chain, which is usually healthier

ARTICLE CONTINUES BELOW

Sales of poultry are up, red meat are down. We're buying more staples, and fewer processed foods. We're eating more fruits and vegetables, and raising a lot more of those ourselves: Home vegetable gardens are projected to be up 40% this year compared to 2007. If these trends continue, the next dire headline out of the recession might just be "American Obesity Epidemic Declines!"

Hard times might help to revitalize local businesses/economies

In the long run, it stands to reason that the current recession might actually help to revitalize long struggling local businesses and economies. Consider these factors: * Transporting products from far away becomes less cost effective, making the produce at local farmers' markets, for example, more cost competitive. * Big national chains are going under in record numbers, opening the door to local/independent businesses. * Local businesses are more responsive to changing demands and have fewer, if any, demands by shareholders for higher returns on investment. * And many local communities, like those in the Berkshire region of Massachusetts, are taking matters into their own hands and finding creative ways to help local business not just survive, but thrive.

This post from the Green Cheapskate by Jeff Yeager is republished with the permission of The Daily Green.  Check out more great content from The Daily Green:

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Guest's picture
Hmm, not driving less.....

Last year as gas prices rose, we cut down a little, but never gave up our big summer trips. You say that nothing awful happened, but it did. Here in MN tourism to resorts was way down, the result I know of 12 in the area we go; that are no longer open. They offered some great deals and gas cards, but they could not survive when nobody booked their cabins. We are 4 hours away from my in-laws who are in their 70's, we still went every month to help them with whatever chores they needed done, and to enjoy being together as a family. If we cut that out something awful would happen, we would regret not spending more time with them when they die. Every Labor Day we go to Deadwood, SD. Did we pay close to $4 a gallon last year? You bet we did! Spending time with all the family for 5 relaxing, phone free, tv free days------worth every penny. Plus with 20 of us converging on Deadwood trust me we bolstered their economy!

So, as you see awful things can come from not driving. It is priorities you set and what is important to you and your family. I can only hope that more resort owners do not close up at the end of this season. The one's we do or have done business with are small "Mom and Pop" owned places, and this was their sole source of income. Not to mention the teenagers they employed during the summer.

Jeff Yeager's picture

OK, Hmm, fair enough. 

But won't there come a day when there just ain't no more gas/oil?  Might it not be best to start preparing ourselves for that day right now? IMO, the days of plentiful and cheap gas are far behind us now; what we saw last summer was the future, only the future will be much more severe, and the cost of that last barrel - when we final pump it - will be priceless.

As for jobs, businesses, economies, etc., I see your point.  But I think we, particularly we Americans, forget that "prosperity" is a relative term.  Even in these times of our economic "crisis," half the world's population - that half that lives on less than $2 a day - would give their eye-teeth to be living among us.

 

Guest's picture
FrugalZen

club.

I bought a Suzuki Burgman 400. A motorcycle that is referred to as a "super scooter" solely because it is step through (motor under the seat not between your legs) and a simple automatic "twist and go" with the ability to go 100 mph...way too fast IMO.

Anyway I use it in place of my pickup that got 16 mpg...the bike gets 62.

I pretend that I am filling up the truck every time fill the bike. It would take 4 times the fuel so I mulitply the cost of filling up the bike by 3 to get what I'm saving on filling up the truck...that money goes into a special savings account...one day it will be used to replace the bike when it wears out.

Guest's picture
Deborah

Through all this I've learned patience. I've become better with finances and have had fun making creative decorations for my home. I can't really do thrift stores due to being a size 3 and becoming frustrated with never finding anything in thrift store or on a clearance rack in my size, but I can go to outlet stores like Bealle's outlet, and save quite a bit compared to places like JC Penny.

I love to ride my bike but my asthma and the awful heat/humidity and bad transit system make it impossible to live in Florida without a vehicle. However, when I move out of state I will get a bike. I've already started working out and getting in shape, with the help of an over the counter inhaler and a decently priced gym membership. Jeff's right, the oil's going to be gone one day and most likely in our lifetimes. We should get prepared.

Also I agree about shopping local. As a small business owner, I understand the struggles one faces when running a small business and try to help out whenever finance allow.

Guest's picture
drew

This guy has not no idea what hes talking about he wrights articles stuck to advertisements and get paid to do so. His life revolves around money as dose for those who have it.  Recession is a state of play put into action to shift the power of money control to a particular/entity division assuming control, check economic history.  Before the great desperation people had personal business with more mom a pop shops with no "dept".  After the great depression mom and pop shops were bought up at bottom dollar prices and the shift of money control was put in the hands of a few.  To this day those family's still own the 1% of wealth in the world, and after this recession is over that 1% will shift again, maybe 2% will have wealth or perhaps that 1% is cut in half.  When war is in action peoples attention is focused on there loved one fighting the war.  Most family's have a loved one in a war right now.  Its strikes me odd that economic history would show that when a billion dollar industry fails and the citizens are left to flip the bill, their job availability gos right out the window, everyone should know that when the younger population have no jobs available their alternative is the military, and what better way to draw the attention away from the what causing that problem then forcing a generation in to a state of war.  War is preventable and avoidable, those left with decision making don't think rational or realistic, no matter what anyone says, presidents love fighting wars after all they don't have to fight right, what do they have to lose.  People have lost sight to the fact that people fight wars, people run factories, people run business, its people to keep this nation alive, it people who die for this nation what gives them the right to assume all power control over our living habits our pursuit of happiness, not a damn one.  Yet look at us cowering back in to our homes accepting "the system" as if its the way its suppose to be.  Supply your self with your own water, try and grow as much of your own food as you can.  Stop going to work and buying gas for a week, if this were done on a national level it would grab their attention log enough to show them who's running the show.  We can continue to live as we do until nothing is left to freedom, or we could grow up and understand that people are meant to live free from dept and labor not at the cost of another but as their personal decision as a pursuit of happiness.  Air is in abundance and can not be regulated thus not charge for breathing it, although water is in abundance but we are charged for it; most of the time the water we are charged for is recycled and came for a sewer.  Food is easily grown and produced and can be done anywhere not just in the ground.  Hydroponics as allowed us to produce food faster bigger and in smaller quarters such as a 13 story building at 36,000 sq feet, and people mostly children die in the thousands every month due to lack of nutrition.  This government has no moral comps to help the people of its nation let alone a dieing one.