Have you made your New Year's resolutions? I am sure in times of economic downturn all could be more mindful of how we spend money and how we spend our time. Maybe there are some good things that can come out of the economic downturn? Hat tip to Deacon Greg! The following comes from the New York Times:
Rosario and Igor Montoya used to buy, buy, buy for themselves and their two children without a second thought. Expensive sneakers, a new laptop, Legos — they all got what they wanted. But with the recession slashing the Montoyas’ workload and income by more than half, their priorities have shifted from products to activities. Others have been desperate to get out of the house, though in many cases, what began as psychic necessity ended with deep appreciation. Rosa Claudio, 47, of Chicago, said that since her husband was laid off from his job in construction last year, she and several relatives had made a family ritual out of going to museums. “It’s something we can do for free,” she said. “It’s enjoyable.”
The Montoyas, meanwhile, likened canoeing to therapy. “When you’re out there in the water,” Mr. Montoya said, “you can think about things openly and freely,”
Only a few years ago, Mr. Montoya and his wife — who worked as a freelance wardrobe stylist, mainly for Macy’s — had enough disposable income to spend up to $1,000 a month on designer clothes for themselves and their children, Camila, 13, and Diego, 6. But after major advertising cutbacks last year, work practically disappeared. Their lives, they said, were thrown into reverse.
First, they told their children that “we can’t spend money every day” and that they were living on savings and family help. Then they started camping more. And as they hatched plans to start a catering business in the spring, Mr. Montoya discovered a used canoe onCraigslist.
He talked the seller down to $150, from $200. “Money is tight,” Mr. Montoya said, as he packed a picnic in the boat on a recent Saturday morning. “But it’s worth it.”
There are, of course, potential problems as the United States drops old habits of consumption. On the macro level, economists worry that it could undermine a recovery. And the shift may be temporary: holiday shopping appears to have increased a little in 2009.
But in many homes today, experiences have become a more valued element of life. Mr. Hoyt, at Moody’s Economy.com, said that the behavioral changes were likely to be less transformative than what followed the Depression but that after three decades when consumer spending outpaced gross domestic product, the end of a spendthrift era may be here.
Camila Montoya said that even teenagers were now wearing old clothes longer. And for Christmas this year, she said she wanted something different and a little more hands-on: a camera.
Her parents gave in only after finding a discount they could afford.
“It’s the only present that she got,” said Mrs. Montoya, 43. “We didn’t want to spend too much money on someone who is 13 years old.”
After school and on weekends, the family now hops into a pink canoe they bought secondhand. They paddle though Biscayne Bay to nearby islands, naming each, sometimes making boats out of sticks and leaves.
“I’m trying to teach the kids that you don’t need to have expensive toys to have fun,” said Mr. Montoya, 47, an artist and freelance art director in advertising. “You can make it fun, from anything.”
Quietly but noticeably over the past year, Americans have rejiggered their lives to elevate experiences over things. Because of the Great Recession, a recent New York Times/CBS News poll has found, nearly half of Americans said they were spending less time buying nonessentials, and more than half are spending less money in stores and online.
But Americans are not just getting by with less. They are also doing more.
Some are working longer hours, but a larger proportion, the poll shows, are spending additional time with family and friends, gardening, cooking, reading, watching television and engaging in other hobbies.
The Department of Labor’s time-use surveys show a similar trend: compared with 2005, Americans spent less time in 2008 buying goods and services and more time cooking or taking part in “organizational, civic and religious activities.”
Just as tellingly, evidence can also be found in culture. While one new study shows that attendance at museums and cultural events dropped from 2002 to 2008, it has climbed in 2009 at many major institutions, including the Museum of Modern Art in New York and the Art Institute of Chicago. Movie attendance was also up 5 percent in 2009, and in the world of the Walt Disney Company, product sales have declined as the company’s theme parks enjoyed a 3 percent increase in visitors last quarter.
Even here in Miami, a city famous for its materialism, retailers are hurting while audiences continue to grow at the Adrienne Arsht Center for the Performing Arts, at parks and for cheap activities like yoga by the beach.
“It’s a different kind of recession,” said Richard Florida, the author of several best-selling books about the economics of cities. “It’s not like in the ’30s when people stopped going to concerts. Now people seem to be keeping up with experience consumption and cutting back on other necessities.”
Psychologists have been saying for years that shared experiences like vacations lead to more long-term happiness than the latest bauble. And perhaps the change was inevitable — to be expected when a shopping-spree nation trades a glut of credit for layoffs and furloughs.
“Part of it is cyclical,” said Scott Hoyt, senior director of consumer economics for Moody’s Economy.com. “They have less money, so they’ll spend less time and money shopping, whether they want to or not.”
Still, the New York Times/CBS News poll — a telephone survey of 855 adults, conducted Nov. 6 to Nov. 8, with a margin of sampling error of plus or minus three percentage points — found that the shift spanned income brackets. And in interviews, many Americans described motives beyond pure economic necessity.
Barbara Koricanek, 73, a retired nurse in rural Texas, said she cut back on shopping after a recent mission trip to Nicaragua made her realize that “we don’t need half of what we got.” Over the past few months, Ms. Koricanek has started purging her closets and baking bread from scratch, partly because it tastes better, she said, partly to become more independent.
“We cannot rely on money and the banking system and government to come up with all the answers,” she said. “People years ago were more self-reliant and were more able to take hold of the reins and do things themselves. I think we need to get back some of those basics.”
Many young people, experiencing their first economic downturn, are also making different choices. Megan Stallings, 25, an investment analyst in Raleigh, N.C., said she first learned to value experiences while studying abroad in college, when the dollar was weak and trips brought her better memories than souvenirs. Now, she said, she spaces out her shopping trips to preserve time for activities. She has even studied how stores organize displays to make people buy more than they need.
“That awareness has saved me a lot of money,” she said. “Now I am having fun working on projects around my house, even if it is just pulling weeds or taking my dog, Amos, for a long walk.”
Those with diminished incomes described activities in slightly different terms: as a distraction from financial fear. Some, like Rebecca Heverin, 57, a former tollbooth collector in South Carolina who now lives on disability payments, have hunkered down with hobbies. Ms. Heverin said she worked on her doll collection at home instead of accepting dinner invitations from neighbors because “it’s kind of embarrassing to be struggling.”
Others have been desperate to get out of the house, though in many cases, what began as psychic necessity ended with deep appreciation. Rosa Claudio, 47, of Chicago, said that since her husband was laid off from his job in construction last year, she and several relatives had made a family ritual out of going to museums. “It’s something we can do for free,” she said. “It’s enjoyable.”
The Montoyas, meanwhile, likened canoeing to therapy. “When you’re out there in the water,” Mr. Montoya said, “you can think about things openly and freely,”
Only a few years ago, Mr. Montoya and his wife — who worked as a freelance wardrobe stylist, mainly for Macy’s — had enough disposable income to spend up to $1,000 a month on designer clothes for themselves and their children, Camila, 13, and Diego, 6. But after major advertising cutbacks last year, work practically disappeared. Their lives, they said, were thrown into reverse.
First, they told their children that “we can’t spend money every day” and that they were living on savings and family help. Then they started camping more. And as they hatched plans to start a catering business in the spring, Mr. Montoya discovered a used canoe onCraigslist.
He talked the seller down to $150, from $200. “Money is tight,” Mr. Montoya said, as he packed a picnic in the boat on a recent Saturday morning. “But it’s worth it.”
There are, of course, potential problems as the United States drops old habits of consumption. On the macro level, economists worry that it could undermine a recovery. And the shift may be temporary: holiday shopping appears to have increased a little in 2009.
But in many homes today, experiences have become a more valued element of life. Mr. Hoyt, at Moody’s Economy.com, said that the behavioral changes were likely to be less transformative than what followed the Depression but that after three decades when consumer spending outpaced gross domestic product, the end of a spendthrift era may be here.
Camila Montoya said that even teenagers were now wearing old clothes longer. And for Christmas this year, she said she wanted something different and a little more hands-on: a camera.
Her parents gave in only after finding a discount they could afford.
“It’s the only present that she got,” said Mrs. Montoya, 43. “We didn’t want to spend too much money on someone who is 13 years old.”
