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BusinessWeek: The New Age Of Frugality
By: TraderMark   Sunday, October 12, 2008 9:01 PM

But that won't deter the newly thrifty. "I can't help the economy," says Kim Schultz, a resident of hard-hit Avoca, Mich., who with her husband, Jon, owes $40,000 in credit-card debt. "I've got to help myself." (I believe we were told this is unpatriotic - if you don't shop you are helping the terrorists. You are either with our mall based retail outlets or you are against America)
  • On the other hand, this newfound austerity could—emphasis on could—rewire Americans as savers rather than spenders. And that would help put the economy on a sounder footing over the long haul. (I agree 100% with this)
  • Thrift has gone in and out of style since the founding of the republic. In the McGuffey Reader of the 19th century, Benjamin Franklin was held up as a paragon of virtue for his frugal ways. Later, people who lived through the Great Depression were in some cases marked for life by the experience.
  • Typical of them is Bernard Handel, an 82-year-old resident of Poughkeepsie, N.Y., who grew up poor in the Bronx. In the early 1930s, his father's grocery store failed and his dad couldn't find another job for several years. To this day, even though Handel became very wealthy, he shops for food with coupons, drives a Honda, and takes the subway rather than taxis. "I just don't believe in throwing money away," he says.
  • Handel's baby-boomer children grew up without psychological scars from the Depression. And the boomers' children have come of age in an era of abundance, easy credit, and a taste for luxury. So it's no wonder that the sudden need for thrift comes as an upsetting shock for many.
  • As joblessness creeps up, many more Americans will receive their own crash course in frugality. It has already happened to Ned Penberthy, 53, a salesman who lives in Pelham, N.Y. He recently got a new job, took a cut in base pay, and has been living the frugal lifestyle ever since. Penberthy says he's in it for the long haul—willing to spend more up front to reap savings over the next several years.
  • Like a lot of boomers, Penberthy has a nest egg, but many people in their 20s and 30s have little to fall back on. To get on track, they have to learn the difference between necessities and discretionary spending. "They need to go back to (psychologist Abraham) Maslow's hierarchy of needs—food, clothing, shelter, and transportation," says Kristine E. Miele, a financial planner.
  • In the past, consumers have gone shopping the moment the sun came out. But this time? Market researchers trying to divine the consumer psyche are picking up signs that attitudes are changing. Much the way pump prices have prompted many Americans to forsake SUVs for small cars, the collapse of home values and 401(k)s will make consumers think twice before hitting the mall. (again, very unpatriotic people to look out for themselves rather than retail outlets)
  • The NYTimes also follows up with the gasping from teeangers across the country as their parents actually have to say "no" (we discussed this in (Jul 5: Bloomberg: Teenagers Skip $50 Jeans in Squeeze of Gas, Job Shortage))

    The Frugal Teenager, Ready or Not
    • WHEN Wendy Postle’s two children were younger, saying “yes” gave her great joy. Yes to all those toys. The music lessons. The blowout birthday parties. But as her son and daughter approached adolescence, yes turned into a weary default. “Sometimes it was just easier to say, ‘O.K., whatever,’ than to have the battle of ‘no,’ ” said Mrs.


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