The recession has taken its toll on people’s spending habits. It is a situation that has forced everyone to rethink and reevaluate the way they manage their finances. Every penny matters now and therefore every financial move matters as well.
How the recession is affecting people’s spending habits
1. Credit cards
For some people, credit cards are not to be used during an economic recession, as there is no guarantee that they will manage to pay their minimum monthly payment on time. On the other hand, for other people who do not have any savings and are eager to make certain purchases, credit cards seem to be the only option they have. Of course, since they cannot afford paying the minimum monthly payment on time, their financial problems quickly add up.
2. Increased cost of living
With the rising costs of food and gas, many people are forced to spend a lot of money on them that they wouldn’t spend otherwise, and that in turn leaves them with less money to pay for utility bills, rent and loans. A good solution to the problem would be to regularly use leftovers to prepare meals in advance and learn to use public transportation instead of the car respectively.
3. Save more and spend less
In these times of financial insecurity, many people tend to save more than before, as they constantly worry about what they will do in case something unexpected happens. That translates into less spending on their part. Instead of going to the movie theaters, they prefer to either rent movies online or watch them on the Internet. They rarely visit the bookstore, as they prefer to swap books with friends and neighbours. Instead of buying clothes they prefer to modify them themselves or borrow clothes from friends with similar clothing size and taste.
Going to restaurants becomes a luxury that they tend to avoid, as they prefer to spend a quiet evening home and brush up their own cooking skills. Short trips during the weekends are pushed to the back of their minds, as they are aware of the fact that the high cost will not let them enjoy the experience. Instead of going to a beauty salon, many women ask from a friend or neighbour to do their nails and hair at a low price.
4. Look for anything free
During a recession, many people anxiously look for anything free so as to eliminate costs and save as much money as possible. The free entrance option is the only option they will accept when it comes to their entertainment. As a result, theaters, restaurants and movie theaters suffer enormously. Instead of purchasing beauty products, many women opt for free samples. Subscriptions to newspapers and magazines as well as memberships to gyms are cancelled, as people prefer to read them online and exercise on their own at home, respectively.
The recession is affecting people’s spending habits in more ways than one. The adjustment is going to take a while but it is necessary in order for things to go smoothly.