Between the beginning of the recession in 2007 up until May 2011, Americans have cut spending by nearly $7,300 compared to what they would’ve otherwise spent if the recession didn’t occur. Looks like the recession had a lingering silver lining. Reported by the Federal Reserve Bank of San Francisco, the report shows that the average consumer spent about $175 less each month than before the recession.
Hats off to all you consumers out there for pinching pennies at the grocery store, clipping coupons, skipping morning lattes, trimming vacations, and whatever small yet significant ways your own household tightened its belt to cope with the recession. It’s healthy to trim the fat from your finances, and imagine what $175 saved each month can go towards—to pad a savings account, build an emergency fund, or hack away at debt.
Consumer spending is inching up since the start of 2011, which is necessary for a recovering economy. However, look for ways to keep up your smart saving and budgeting; slipping back into pre-recession spending habits could lead to the same over-borrowing on credit that pushed Americans to the brink of recession.
Need motivation to keep up money-saving habits?
Try following the crowd! A recent Harris poll found the top 10 ways Americans are cutting back on spending, which can definitely help keep you on the right track for smart spending.
1) 67% of Americans started purchasing more generic brand goods at the grocery store.
2) Almost half of us, at 46%, are brown-bagging lunch from home instead of buying.
3) 43% are skipping appointments and going to the hairdresser or barber less often.
4) 39% switched from purchasing bottled water to using a refillable water bottle (a wallet and environment friendly move).
5) 31% cancelled one or more magazine subscriptions (also environmentally friendly).
6) About a quarter of us, at 24%, are cutting down on dry cleaning.
7) 22% cancelled or downgraded television cable.
8) 21% are skipping buying coffee in the morning (and maybe making it at home instead).
9) Following #5, 18% cancelled a newspaper subscription .
10) 16% cancelled landline phones and are relying on cell phone instead.
Which of these strategies are you already doing, and which new ones can you pick up to add more money-savvy moves to your daily routine?
Justine Rivero is the Credit Advisor and resident Credit Rockstar for Credit Karma, the pro-consumer credit advocate that helps more than 2.6 million consumers realize the everyday cost savings of having great credit health.