A downturn in the economy can necessitate a change in shopping and spending habits, and the longer the downturn the more change becomes necessary. When a tight budget tightens your purse strings, you purchase on a priority system. Priorities dictate what you purchase, and may dictate where you are going to purchase them.
What You Purchase
One item to eliminate from purchase decisions is pride. Pride is expensive and when cash flow declines, purchasing pride is not an option. For example, if you’re thinking about purchasing a new house, and cash flow is tight, have you studied the cost differential between remodeling your present home, and purchasing a different one? Chances are, it’s less expensive to remodel your present home than to purchase a new one.
What about the new car you want to purchase because you’ve had your present one a few years, and you’re tired of it. Besides, it may start to nickel and dime you to death. Instead of listening to your own rationalization, and rushing out to buy a new car, consider the financial ramifications between buying a new one versus keeping your older one.
Why not take the down payment money you need for a new car, the licensing and sales tax money, the extra monthly payment dollars a new one would cost and put it into a savings account. That would make a nice contingency fund for car repairs. In addition, you might have your present car painted a different color have the seats upholstered, or maybe a new stereo system. Psychologically, changes like that make it almost like having a new car, but less expensive.
The process of thinking about less expensive options includes most everything your purchase. Challenge yourself to find ways you can save money, and still have a life. Fast food is an idea. Many fast food restaurants serve a good meal for a reasonable price. Where else can you eat out for under $10.00 a meal, and not have to tip?
You’ll be surprised at what you can do, and buy, for less money than you are accustomed to spending. Remember, Ben Franklin said “a penny saved is a penny earned.”
Where You Purchase
Economic downturns also affect what stores you shop, because if you purchase from a top of the line store that sells top of the line brands, you are going to pay top of the line prices. A long economic downturn affects the store environment.
Stores and businesses that benefit from economic downturns are Goodwill, stores that carry only store brands, second hand shops and one-stop shopping stores in malls. A Handy Man technician stays busy, budget shops and consignment stores open where they find available space. If you’ve never shopped one of these type stores you’re missing an opportunity. It’s not unusual to find name brand items, some with original tags, selling at half or less the original price. An economic downturn also changes the makes, models, and newness of the cars parked in these stores parking lots, as prime time shoppers cease purchasing their pride.