Will "forced frugality" last?

by Xin Lu on 18 July 2009 27 comments

Lately I have been hearing about the concept of "forced frugality" from the media and my peers.  Many colleagues and  family members say they feel a need to be frugal in this economic climate due to job loss and investment losses.  With this shift to frugality it seems that shopping at thrift or dollar stores is suddenly trendy.  However, will this new wave of frugality last?

Right now some households have no choice but to be frugal.  With job losses, credit card companies aggressively cutting credit lines, and home equity lines drying up due to the drop in real estate prices, many are forced to be conservative with their cash.  

If these households were not particularly thrifty previously, this new financial reality may be painful.  There is definitely a learning curve to spending less.  You have to research cheaper alternatives to everything in life and find creative ways to cut expenses.  Another issue with a sudden conversion to frugality is that many things that were taken for granted may become luxuries.  Several friends have told me that they are eating out less, and some are buying less entertainment.  It is understandable that this sudden onset of forced frugality can cause quite a bit of anxiety because people feel that they have to work harder to live on less.

In contrast, those who were already living a frugal lifestyle are enjoying this recession in many ways.  Many retailers and restaurants are cutting prices to attract customers, and the frugal folks are seeking these deals out and stocking up.  A lot of them are also quite happy that their frugal habits are now more accepted by others.

But will the newly frugal carry their current survival tactics past the current economic malaise?  Will they realize that living on less is easier than they once thought? Can they learn to enjoy saving money and living a simpler life?  Or will forced frugality continue to feel painful and restrictive, so that they'll jump right back to their old lifestyles once they could afford it again?  How long will it take until forced frugality becomes a habit that can't be kicked even when it's no longer necessary?

Are you being forced to be frugal right now?  Will you stick with a frugal lifestyle once the economy recovers?

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Guest's picture

Yes, I'm forced to being more frugal than ever right now because of the economy. My friends are more frugal than before.

But do I think it will last for most people? Probably not. Those of us who read blogs like this will probably only loosen up a little, but if gas prices stay down and things get good again, I think people will still buy gas-guzzling cars and bigger houses than they can afford.

The problem we have is deeper than a flesh wound. It's a problem with our basic philosophy and only those who are hit the absolute hardest will have a lasting change, borne from the inside out.

Guest's picture
Guest

Things get better and they'll go right back to how they were. I wish it wasn't true but I believe it is.

Guest's picture
Lucille

Those forced to will go right back as soon as spending on whatever the new fad is becomes trendy again and they have or think they have the money to spend.

Lack of easy credit might be the only thing preventing this.

I fell back into my old frugal habits as our income dropped and then the economy. Looking back many of the things done previously seem unsustainable and a poorer choice than what we are opting for now. The only things I can see us doing more of if our situation improves is entertainment and travel.

Guest's picture
Jeremy

There is definitely a lot of pressure to be frugal for my family and me. Even though the harsh economic climate has only been harmful to my parent's 401k, we still "pinch pennys" much more than we used to just because others are doing it.
I notice it most, though, when we went to Europe on vacation and most of our friends were incredulous and almost upset with us for taking advantage of great flights and hotels.
Personally, I don't think that this is at all permanent and many positive things will result from it. We eat out at restaurants less now for health reasons but cutting back definitely has benefits even if you are not in terrible financial straits. As I have said before, people should start living simply and graduate to more and more luxuries.
A starting salary may not be enough to support the new cars that you want or going to the movie theater every Friday but won't it be better in the long run to have enough money to travel and not worry about expensive dinners.

Guest's picture

Yes, there is a learning curve to frugality. Many of the tricks that work for middle class or working class families require an investment of time, money or both before the savings are noticed on the cash flow.

Now once those new routines are set, or the supplies and equipment have been purchased, it is easier to maintain what you are already doing. I'm sure people will be glad to break out of the frugal tactics they find to be stressful or annoying when money flows again, but why would they drop the routines that they enjoyed or worked really well for their family?

Guest's picture
Cat804

I don't think it'll last for most people. For those that have truly embraced the lifestyle, it'll persist. For those that are doing it out of fear or necessity- it will go away as soon as the fear or need goes away. It reminds me of gas mileage was such a huge deal at $4 a gallon, but the Hummers were back on the road at $2 a gallon.

Guest's picture
Cheryl

I am having to be a bit more frugal than usual, and many of the changes will last for me. They're becoming habit. I also think many people WILL continue to live more frugally after things turn around. Anyone out there have a parent or grandparent who lived through the Great Depression? For many of those people, careful frugality absolutely stuck around. I'm sure there are plenty of folk learning valuable, life-long lessons today.

Guest's picture
Jen

I am not "forced" to be frugal right now. My husband and I pretty much live the same life style we have always been. We have always try to live frugal life style regardless of our income (from poor college students to double income to now a single income because cuurently I am a stay at home mom). I think if a person thinks that he/she is suffering because he/she has to cut back, then it would be very easy to go back to bad spending habits as soon as the person's financial situtation changes again. I have a friend who is losing her home because she can no longer afford her mortage payment. Instead of looking at it as a blow to her credit, she is looking forward to going on vacations with her extra money since she has stopped paying her mortgage payment. Therefore, I don't think it will frugal life style will last for most people.

Guest's picture
barnabas

i used to spend a lot on myself, until, about 2 years ago i needed to put up a small house for my parents. i needed to cut on my spending if i was to be able to complete it in time. i have been pleasantly surprised that frugal living is fun and very possible. i actually have more money on me, now and realize that many things i thought were necessities were actually luxuries. i will remain on frugal living even when the house is complete. it's been great training.

Guest's picture

I began using coupons shortly before we were "forced" to do when my husband closed his company. I went to a meeting where Stephanie Nelson, aka CouponMom, gave a presentation explaining how to use coupons. I chose to go to this meeting because I had read an article about couponing in a maaazine (Women's Day, Better Homes, etc.). The article intrigued me but I did not get all the concepts. Once I went to the meeting, I totally got it and began saving coupons and using them. I could not believe the deals you could get. At the time, we were doing fine financially at home and did not "need" to use coupons just to make ends meet. While I had started using the coupons I did not do it all the time.

Then my husband closed his company and we sank into an abyss financially for us. We could be considered the poster children for the economy right now and have lost everything that had financial value. Still, we have each other and our children and a good attitude so do not feel sorry for us. When this happened, we really needed to use the coupons to make ends meet. We started using them in full force. My husband has embraced the couponing as much as me. He helps me clip them and helps with the grocery shopping and uses them happily as he shops.

In addition to couponing, we have learned how incredibly awesome Craig's List is. I do not think we will ever purchase furniture at retail value again. We sell things on ebay. We think long and hard before making a purchase. We are quick to let go of things that are not important to us and keep only the things that truly have value and meaning to us. We find multiple uses for things before throwing them away.

We are certainly not the most frugal people out there. I still have a weakness for books. I love books and I love to purchase them new. So, I allow my indulgence for new books as long as they are on the bargain rack at Barnes and Noble or Borders.

Thank goodness there are so many blogs like this one to teach us how to be more frugal. Will we go back to our old ways? For the most part I would say no. Couponing is a way of life for us. We know how much can be saved by purchasing second hand and reusing items. On the rare occasions now when we do make a quick stop into CVS for something we need right away and do not have coupons for it with us, we feel like we are leaving money on the table. A few dollars here and there add up so quickly. These lessons cannot be unlearned.

Now, we would love to have a nice vacation again at some point in our future and I cannot wait until we can have a few spa treatments at some point in our future. So, we might still indulge every once in a while but for the most part there is no turning back.

Guest's picture

It won't last for most people who feel that it's forced frugality. People don't like to be forced into anything. Then it feels like punishment. For those of us who felt like becoming frugal was a conscious choice, frugality is something we can be proud of -- and not something we'll just give up because we can.

And whether it feels forced or like a choice I think has more to do with the person than the circumstances in many cases. My husband and I chose frugality, but we chose it when we knew we needed to be more frugal -- though we weren't quite forced into it literally as we certainly had more credit we could have spent. We look at it as a blessing, so yes, our frugality is here to stay.

Guest's picture

It won't last long. Already, the stock market is up 39% from its lows and Wall St. is going to pay record bonuses. It's human nature to adapt, and human beings are adapting to good times returning again. Caveat, so long as you aren't one of the 10% of Americans who are unemployed, things have gotten a lot better.

Rgds,

RB

Guest's picture

Greed will always return, it's just human nature.

If my bonus goes up 100% this year, and matches 2007's record, I am definitely going to splurge on something, be it a new used car, or another rental property.

When times are tough, ironically I like to spend more bc it helps balance out the toughness. When times are good, well, it's a joy to save bc things are already so good!

Rgds,

RB

Rich By 30

Guest's picture
Guest

I quit my full-time job in 2007. Since it was by choice, the frugality-requiring consequences also felt like a choice, and that made it loads easier. I stopped looking at my stocks as they were on the way down (since I wasn't going to sell), and I don't look at them now that they are on the way up, so I still feel poor, which helps me to stay in the frugal mindset. For example, I had to go on a family-related-business trip and stayed at a hostel -- it was really fun (and really cheap)!

Guest's picture
John Schiro

Let me simply say that forced frugality will be a way of life for most,for quite a while.

If any one thinks the economy is getting better because the stock market went up today, just wait untill tommorow.

The optimist will learn to be frugal now,and stay that way.

The Reason ? Lack of trust in the small ups, and Government
remedies. Example: dose any one trust gas prices to go down,
and stay down .

Buckle up friends, your in for a long haul of frugality, and you WILL learn.

John S

Guest's picture
Olivia

If our finances open up we set aside for big splurges, like travel. But at home in the trenches, we stay the course. Saving, sale shopping, thrift stores, yard sales, gardening and canning are part of our normal rhythm. We had to be careful before the economy slump, and that hasn't changed. It is nice to encourage others in the frugal lifestyle without being considered oddballs.

Guest's picture
Guest

"Forced to be frugal"- I think this hits hardest amongst my young married friends with babies or young children. As bad timing goes, many had babies but then the husband (usually the wife is SAHM) lost his job. It breaks my heart to see some of my friends setting aside each and every penny for their baby, but they are 100% willing to cutback on their own personal spending in order to provide for baby.

On the other hand, there are also lots of people who are going thru the motions of being frugal, since it is so in vogue right now. But I find it ironic that I see housewives with freshly coiffed perms, fake-bake tans, manicured nails, and Louis Vuitton purses choosing to hold up the line just to scream at a cashier for not honoring a 25 cent coupon for paper towels. Like those 25 cents are going to break her bank account?

Guest's picture
Guest

How long will it take until forced frugality becomes a habit that can't be kicked even when it's no longer necessary? As bad as things are right now, I don't see that happening for a long time, if ever. It's a habit I want my family to embrace. One of my friends has already filed bankruptcy twice and it's not because of the economy, but because of her ridiculous spending habits and buying wants instead of needs, and I'm sure she's not the only one. At least she's inspired me to save more and buy less. Plus, my kindergartner is quite good at cutting coupons and it improves his fine motor skills.

Guest's picture
Guest

As with all experiences in life, some will learn to be permanently frugal, some won't, and most will learn just enough to be frugal in some (enjoyable) areas while being un-frugal in others. Still ... this is the chance for those of us who've been pinching pennies for years to set a positive example and become trendsetters for others. When I teach self-help classes to low income women and they whine it's terrible they can't take their kids shopping at the mall, I point to whatever I'm wearing and say something like "thrift shop, $2.50." I make a deliberate point of wearing something gleaned from a thrift shop to do these classes. There's nothing like having a highly paid professional set a frugal example to get them off their consumeristic high horse.

If that fails, start "baa-ing" at them like sheep. Baa, I'm a mindless consumer. Baa, the TV tells me to buy and I buy, buy, buy. Baa, I'm broke, but I keep spending because multinational corporations tell me I must and I'm too stupid to questions their motives even though they caused our economy to melt down. Baa, lets support slave labor in China, go broke, and line the pockets of fat-cat CEO's in the process just because I'm too stupid to stop following the crowd. Baa, baa, baa!!!

Guest's picture
Stephanie

We have definitely learned to become more frugal than ever before, and while there are some pleasures we would add back into our budget, for the most part we plan to stay the course and build up an emergency fund and remain debt free. If the economy ever improves (feeling discouraged about that right now!) I am hoping we can keep living on less so we can give and save more.

Guest's picture
TheTusk

Looks like a man with an axe sitting on a felled tree. I wonder if he is a freemason. Or is this the era of a new carpenter?

Guest's picture
Kablamo

Good question... Those who got really burned and lost a lot might change permanently, or at least live more frugally. The 90%+ still employed might keep the habits/tricks they realized aren't so bad, but it's only natural to spend more when we feel richer. Others haven't learned a thing so as long as they've got space on their credit card they'll use it.

Overall the economy probably won't be quite as strong as it was the last few years. People, businesses and governments all learned one thing last year: the great depression could happen again, because our economy is more fragile than we thought. I think this fact alone will keep people, businesses and governments just a tad bit more responsible than before, on the whole. At least for a few years.

Guest's picture
KBaites

The free-spending people who were shocked at the amount they've saved by making their own coffee instead of buying a $5 latte every morning are NOT going to remain frugal. They measure their worth by how much they spend on brands they see advertised heavily.

Stop letting advertising drive your spending habits. Don't be "brand-loyal". (Analyze the cost per unit, and you'll find that a store brand is still usually cheaper than a name brand -- even if you use a coupon on the latter.)

Guest's picture
Kate

I am fortunate in that the downturn in the economy has not yet affected my income. As a teacher, I can't say that I haven't been worried that it will affect me, though. Luckily, I learned from parents and a grandmother how to be frugal and never really bought into the "have to have this and have to have that" mentality.
Because of the downturn, I have become more frugal but it isn't because I can't live on what I make. It is so that I can sock away extra cash in the event that I am affected.

Guest's picture
Paula

Probably some will, some won't. It depends I think on whether the person's values have changed, or just their money supply.

If you're forced to be frugal because you have no money and no credit, and you feel that you're suffering because you can't go to Starbucks and the HDTV is cut off, then you probably won't remain frugal after the money is flowing again.

I was forced into more frugal habits, but my outlook has changed entirely, and I think I'll maintain those habits regardless. I'm trying to use what I've learned to build a better future. Saving has become a priority for me and teaching good habits to my children has as well.

Guest's picture
Anna

As a reaction to all the moralizing I hear about frugality, I actually find myself being less frugal than I was a year ago. I don't go overboard, I mean I've never been able to spend a lot because I never had a large income, though I did go through a rough spot about 10 years ago due to overuse of credit. In the process of getting a handle on that, I went to a "cash" system, where I really don't use credit now at all, except where I absolutely can't avoid it.

When I was really in dire straits, I was very penny-conscious and did all kinds of things to cut back, but when things began to improve, I loosened up a little because I couldn't stand it any more. I am not talking big ticket items, I mean I started buying a package of cookies or a used book once in a while - little luxuries that helped me tolerate the deprivation. At this point, knock on wood, but there's a lot to do at work, so much that my job looks like it could survive the recession. I haven't cut back much because there isn't much to cut.

However, since the first of the year I've been splurging a little here and there, things I wouldn't have done last year, like a weekend getaway. As I said, I think I've gotten sick of the moralizing on how we should ALL be "doing our part" by cutting back. At some point my contrary streak rebels. Besides, someone has got to spend the money that's going to get us out of this economic slump. When the economy is back on its feet with consumer confidence up and jobs being created, you'll have me to thank... ha!

Guest's picture
Guest

Well, all the blogs about 'frugal' living has got me, the 'frugal guru' a bit mad. First, most are saying that it is a new phenomenom. No, it is not. I have been doing swaps, barter, thrift stores, and yard sales for over 40 years. I did so as a 'smarter' way to live, not as a necessity, and soon learned that in addition to those who had to, I would soon start a trend for those who wanted to.
I had a wedding for free, attended by over 2000 people, 3 newspapers, and 4 network TV departments, have found cashmere for 1.00 in a thrift store, because I know how to spot quality, not necessarily brand names, but I have 'learned' the industry names in all categories that I shop for. I did this at an early age, as part of my formal personal education. Everyone needs to do this. I recycle everything possible. I rarely buy at retail, but many times buy new things for used prices. There are many ways to live frugal, but it in no way is a trend. It is a way of live, for those who know better. Cheers, Frugal Guru