Will "forced frugality" last?
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?