The Great Recession has had a profound impact on the way most Americans manage their finances. Just a few years ago people were borrowing and spending without a care in the world. Has anything changed?
According to the Federal Reserve Bank of New York, Americans now have 15 percent less credit card debt and 7 percent less mortgage debt. Loan payments in 2010 were at their lowest level in a decade. Good for us! I hope that statistic has more to do with our changes in spending habits and less to do with the fact it’s harder to get credit.
We apparently are saving more now as well. According to the Commerce Department, Americans put away 5.3 percent of their disposable income in December 2010. Studies show we’re saving between two and three times what we were saving four years ago. Good for us!
The big question is this … will it last? Although a recent survey by Citigroup showed that 52 percent of consumers say the recession has “forever changed” the way they spend and save, a study by the National Foundation for Credit Counseling showed that 66 percent of those surveyed are feeling the strain of having to watch their dollars. The call it “Frugal Fatigue.”
We’re a nation of spenders. Times were so good for so long that many Americans felt that budgeting would never be an issue. The recession changed all that, and forced many people to change their spending and saving habits. My fear is that financial responsibility may be short-lived with two-thirds of the country getting tired of saving. If you are in this group, spend a few dollars. Get past your “Frugal Fatigue.” If you’ve been in a position to get out of debt and save some money, keep that going. You can do both.
Our financial situation helps determine our level of engagement on the job. It is impossible to be fully engaged in our career when we’re not certain we can pay our bills. And because of that, you owe it to yourself to maintain financial responsibility as the Great Recession becomes a memory.