Consumers cut back on small pleasures

Posted by Kendall Harmon

The murky financial outlook and recession fears are factors. Another driver: fear of being out of step with a cultural mind-set that increasingly says less is more. If your best friend and next-door neighbors are cutting back on little luxuries, shouldn't you be, too?

"For years, we had the opposite. It was all about keeping up with the Joneses. Now, the Joneses are starting to cut back," says Ellie Kay, author of 12 personal finance books.

The cold, hard numbers on the nation's economic mood bear out that consumers don't feel flush.

Consumer confidence plummeted in February to its lowest since February 2003, which was just before the U.S. invaded Iraq. The Conference Board's much-watched index of consumer confidence fell to 75 from 87.3 in January, the group reports

"There's a sense that prices are rising — and will continue to rise — but wages will not," says Ken Goldstein, economist at The Conference Board. "This is squeezing household budgets whether they're $200 per week or $200,000 per year. Folks are looking closely at anything they don't have to purchase now."

Read it all.

Filed under: * Economics, PoliticsEconomy

Posted February 27, 2008 at 8:14 am [Printer Friendly] [Print w/ comments]

1. Hope wrote:

Eating lunch out eight times a week.  Just how does that work?

February 27, 11:14 am | [comment link]
2. Marion R. wrote:

It’s not just a shortage of money.  It’s a shortage of time and space. Our home is chock full of stuff which we have no place to put and which we have no time to use.  Indeed, for much of this junk we increasingly have no time to learn how to use it.

February 27, 11:26 am | [comment link]
3. Philip Snyder wrote:

When will we learn that “Stuff” won’t make us happy?  We are lured by the siren song of “Stuff” and we spend our money (a measure of time, I trade my time and skills to my employer in exchange for money) on Stuff and then we spend a lot more time with the Stuff to get it to make us happy.

We could all do with cutting back on stuff in our lives.  Spend more time with family and/or friends doing things. 

Phil Snyder

February 27, 12:08 pm | [comment link]
4. William P. Sulik wrote:

Hope, #1, it’s also our problem with obesity.  tongue wink

Seriously, I think the key was that the reference was to the couple or each having lunch out about 4 times a week.

February 27, 12:43 pm | [comment link]
5. William P. Sulik wrote:

Larry Kudlow on inflation:

While I’ve been a bit dovish on inflation, data over the last 3 or 4 months are changing my mind. Inflation first peaked in July 2005, and then gradually declined through the end of 2006. But since the summer of 2007 — and especially in recent months — there has been an alarming rise of inflation.

Economist Brian Wesbury says the Fed is in denial about rising prices. I think he’s right.

February 27, 12:45 pm | [comment link]
6. William P. Sulik wrote:

says Ellie Kay, author of 12 personal finance books.

Ummm… how many do we need?  Were the first 11 mistakes?

I mean, there are only four Gospels and Paul wrote about, what, thirteen epistles?

February 27, 12:52 pm | [comment link]
7. Wilfred wrote:

Here’s a tip:  Before leaving work each day, stop at the ‘loo.  This saves so much on your home water bill, you will be flush with cash.

February 27, 1:54 pm | [comment link]
8. libraryjim wrote:

What, a royal flush beats a full house?

I actually figured out that depending on WHERE I eat, I save money by going out than by packing my own lunch.  And I like the food better.

February 27, 7:42 pm | [comment link]
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