Frugality fatigue continues to plague the majority of American consumers, who would spend more if they could.
A weak economy is curbing their spend-a-holic ways. Gas and food prices are sharply up, wages are flat and home values keep falling. The latest government data shows that consumer spending is slowing again after a brief flurry around the holidays.
“Even though the Recession is technically over, that textbook definition isn’t being felt in American households,” said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling.
Penny pinching may be the responsible choice but Americans are finding that financial virtue has few tangible rewards. The vast majority of consumers are tired of library waiting lists for bestselling novels, going to movies in the afternoon to capture matinee prices, and stretching their haircuts to every eight weeks or more. They would love to meet friends at a restaurant instead of hosting the weekly potluck dinner. They prefer chicken breasts to drumsticks, new clothes to thrift shop seconds and will never again believe that putting together a jigsaw puzzle constitutes entertainment.
Frugality fatigue entered the lexicon in late 2009, a year into the Recession, as consumers began reporting weariness with buying generic cereal, forgoing Starbucks and brown-bagging to work. These concerns probably seem trivial to the 10 percent of Americans who faced unemployment at the nadir of the job market and the 28 percent who currently owe more on their mortgage than their home is worth.
Frugality fatigue endures. A recent poll by the NFCC found that 66 percent of consumers said they were tired of pinching pennies, but will have to continue that lifestyle. Curbing spending includes creating a budget to live within income, tracking spending and still managing to save for that eventful day when the bottom rusts out of the water heater. The NFCC sees these moves as steps toward financial well being. More than 20 percent of respondents agree and said their lifestyle changes have been positive and they intend to keep them.
A minority – 5 percent – are blowing out the jams. They say they are tired of pinching pennies and have decided to begin spending more. Picture these folks throwing their coupons out the window as they drive to the grocery store and pitching their bread and yogurt machines into the Goodwill pile.
The Recession has fostered frugality among even the wealthiest investors, according to data released in May by Spectrem Group. More than half – 53 percent of investors with $100,000 to $1 million – will limit their debt in the future and 39 percent will work longer than planned.
One-third of investors with $1 million to $5 million have reduced their debt because of the Recession, as have nearly one-fourth of investors with $5 million to $25 million. (Spectrem defines wealth as net worth not including primary residence.)
Tips abound for the thrifty-minded, who can visit scores of websites to learn more about discount coupons and cheaper alternatives for many goods and services. There’s also advice on avoiding frugal fatigue. Consumers are advised to plan one or two luxuries every month, such as an occasional dinner out, to avoid a spending binge brought on by too much deprivation. Frugality fatigue can also set in when penny-pinching leads to a monotonous routine. To satisfy the need for variety and entertainment, consumers can create novel experiences. A visit to a new museum exhibit – perhaps during a free admission event – or a picnic and free concert in the park can revive the soul without breaking the budget. As one frugalista put it, “living for today is just as important as saving for tomorrow.”