Has The Recession Reduced Your Spending?

Sarah and I went house shopping over the weekend. With home prices dropping like a rock, we figure this would be a good opportunity to add more real estate to our investment portfolio. On our way home, we stop by Whole Food to pick up some grocery and couldn’t believe how packed the place was. It made me question if there really was a recession going on.

Now, you can say everyone needs to eat but even among luxury stuff, I still see a lot of consumption happening. For example, the Vancouver Canucks hockey team still sells out every home game even after losing eight in a row. The malls around here are still packed on weekends and trying to find a parking spot in Yaletown is an exercise in frustration on a Friday or Saturday night.

All the economic reports indicate that we are spending a lot less because of the recession. But I want to know, are YOU spending less? That question was put out as the Twitter Question of The Day. The answers were enlightening to say the least.

As for me, I have not reduced my spending. If anything I will be increasing it. However, how I’m spending has changed. Because the recession creates an open window of opportunities, the majority of my spending this year will be going to investments. As Warren Buffet said, “Be fearful when everyone else is greedy and greedy when everyone else is fearful.” It’s time to get greedy!

@sallychow (Sally Chow) says:
@JohnChow When you’re a baby, there is no such thing as a recession!

@Static (Static | -AM-) says:
@JohnChow Not really, as my spending is a lot less than what I earn anyways.

@aponseca (arnold ponseca) says:
@JohnChow we should actually be spending to help businesses, but if you don’t secure some funds now, what would you do if you lose your job

@Justin_Dupre (Justin Bud Dupre) says:
@JohnChow… I’ve increased spending. It’s payed off for the most part.

@mrgarylee (Gary Lee) says:
@johnchow – I actually welcome the economic slap in the face to bring my spending back into control!

@roxxymetal (roxxymetal) says:
@JohnChow Yes the recession has made me reduce spending on things for myself but I still buy the same, if not more for all my animals!

@LinearChaos (LinearChaos) says:
@JohnChow yes, cutting back and saving

@LucidAnna (Anna Sabino) says:
@JohnChow I spend the same but I work harder to achieve same results as I used to achieve before with less work

@susansierra (Susan Sierra) says:
@JohnChow No…I choose to ignore the recession and create my own financial reality πŸ™‚

@Coop56 (Coop56) says:
@JohnChow I’ve increased spending…on advertising πŸ˜‰

@jeffkee (Jeff Kee) says:
@JohnChow Temporarily, but now my business is picking up contracts from companies not affected, so my income is actually higher!

@jhelmuth (Josh Helmuth) says:
@JohnChow Absolutely. Especially after being laid off.

@creamers (Creamers (Wes)) says:
@JohnChow I actully spent more

@chrisjacobson (Chris Jacobson) says:
@JohnChow The recession has made me more cheap than I previously was… and I’ve always been pretty damn cheap!

@helenadenley (Helena Denley) says:
@JohnChow spending pattern has changed to accommodate a new baby – some spending has been reduced in some areas to keep overall spend stable

@funkstop (rahimadatia) says:
@JohnChow hasn’t just made me rethink – but I’ve notice my social group haven’t been organizing as many nights out to fancy restaurants, etc

@rajasekharan (Rajasekharan N.) says:
@JohnChow: Yes it has made me a miser in monthly bills or rather on anything that I could save except while hunting out for cheap assets!

@mrlaughter (Tony Klein) says:
@JohnChow Absolutley., I think twice about fast food..I am cooking at home more

@florabrown (florabrown) says:
@JohnChow –Yes, I’m spending less

@sarahhayball (sarahhayball) says:
@JohnChow No choice but to reduce spending…hubby works/ed for the automotive industry.Any surprise he is now unemployed?

@runstartup (runstartup) says:
@JohnChow no, it didn’t affect me ;P

@justinwohler (justinwohler) says:
@johnchow the recession has not reduced my spending in fact i have actually been making more money! www.buzzafied.com

@sensonize (Monty / Mohnish) says:
@JohnChow Umm.. Not really. But yes, it has effected me. Never mind, I’m all cool about it πŸ˜‰

@GregEh (Greg Andrews) says:
@JohnChow No, but unemployment has.

@JDEbberly (J D Ebberly) says:
@JohnChow The recession HAS caused me to put off big-ticket purchases for a few months, until I see how the stimulus works.

@bmtrnavsky (Brad Trnavsky) says:
@JohnChow only a little. I am trying to position myself to take advantage of the eventual recovery.

@docputer (docputer) says:
@JohnChow I have reduced my spending. I cut back to one dedicated server, and culled out some of my underperforming domains

@rahsheen (Rahsheen Porter) says:
@JohnChow Nope. I wasn’t spending much before, and I’m not spending much now. I don’t make enough money for it to matter.

@riaancornelius (riaancornelius) says:
@JohnChow Not yet, but in South Africa we’ve been relatively shielded from it so far. Things are taking a definite down turn now though.

@AndyBeard (Andy Beard) says:
@JohnChow if you have a 2 year old son, is it even possible to decrease spending?

@uxmaven (Lynne Polischuik) says:
@JohnChow Yes to some degree. Not so much because I have to but more that seeing so many others in a bad way reminds me frugality = good.

@opinionatedant (opinionated ant) says:
@JohnChow nope but perhaps that’s because I lean towards frugality (sounds better than being cheap don’t you think).

@AffConfession (Alan LeStourgeon) says:
@JohnChow Recession, what resession? I’ve decided to sit this one out. I’m just doin’ what I do every day and loving it.

@RobertB (Robert J. Ballantyne) says:
@JohnChow No, but spending for me is not recreation. I will spent to support my business and for travel to trail heads to backcountry ski.

@russco (russco) says:
@JohnChow It’s probably because I pretty much have a fixed income that I find myself spending as much as I usually do. Might change soon?

@JordanBrill (Jordan Brill) says:
@JohnChow yes it definitely has! business is starting to get slower…

@betshopboy (cheewee) says:
@JohnChow the recession has planted feelings of job insecurity in my mind which has in turn reduced indiscrete spending on extravagance.

@nazra (nazra) says:
@JohnChow of course i have to reduce my spending. but unfortunately, when i’m eager to buy something, i will buy it. so shame on me +.+

@AussieSire (AussieSire) says:
@JohnChow Nope, I’m as conservative as always. I only buy what I need

@TailgatingIdeas (TailgatingIdeas) says:
@JohnChow Recession, plus football season being over, has forced me to reduce my advertising rates to get 100% of ad slots claimed.

@meethere (meethere) says:
@JohnChow definitely yes. Recession has decreased our earnings and so the spendings. πŸ™ Obama… do something !

@alexiskn (alexis norton) says:
@JohnChow yes!!!! kinda hard to live on $400/mo unemployment… πŸ˜‰ needless to say, notsomuch shopping lately.

@ericgaray (Eric Garay) says:
@JohnChow I’m also naturally frugal, but not cheap. I’ve never lived near, at, or beyond my means. I’m my Govt’s worst nightmare!

@ronaldec (ronaldec) says:
@JohnChow For food, yes I do plan more. I map that store like Gen. Patton.

@robhanly (Rob Hanly) says:
@JohnChow Definitely. I was retrenched in Novemeber 08 and now work from differently. I have less expenses, & less chance to impulse buy!

@michaelkwan (Michael Kwan) says:
@JohnChow The recession hasn’t affected my spending, because I’m naturally frugal anyway. Saving is like earning – http://tinyurl.com/dyrz2f

@One_Fat_Spanner (andy_brabant) says:
@JohnChow oh yeah for sure mate. spending much less of stuff like gasoline

@techbower (techbower) says:
@JohnChow no, I still spend just as much.

@TheHockeyWriter (Bruce Hollingdrake) says:
@JohnChow No, from what I see around me Montreal has been spared from the recession -so far.None of my local peers are in need of work

@TheAdamBox (Adam Henningsen) says:
@JohnChow I have reduced spending big time, since I got laid off. It sucks to be dependent on someone for money. I’m going to change that

@JasonLandals (Jason Landals) says:
@JohnChow No reduction in spending here. Just going with my day to day expenses, and will be investing in some stocks now since they are low

@lockerhaxor (Oliver) says:
@JohnChow To say the least yes it has. I can’t buy equipment for my hobbies (ie HD camcorder), I need to focus on just the essentials.

@cupcake85 (Pamela) says:
@JohnChow Yeah I’ve been trying to cut back on anything frivolous plus having a baby made me want to save more.

@EricBoisen (EricBoisen) says:
@JohnChow No I didn’t have a job before the recession because I’m only 15 and no way to get tothe job. So in short, I was poor before it.

@coolwebdev (coolwebdeveloper) says:
@JohnChow Yes, reduce on the spending that was not necessary to begin with. I still spend on what I have to though.

@Charlie (Charlie Flowers) says:
@JohnChow My reduced spending is due to lack of a job, which was not due to the recession, but the end of my specified term.

@harryinc (Harshad Ghodke) says:
@JohnChow No. In fact my spending have been increased since January 2009

@sheldonpearce (sheldonpearce) says:
@JohnChow It has changed my business spending more than my personal spending…

@bwsteam (BWS) says:
@JohnChow I am a student and get normal pocket-money! No recession for me! I still spend same amount.

@ray_ebersole (Ray Ebersole) says:
@JohnChow The recession has affected my spending. My 2nd job has stopped getting me jobs. I have had to look elsewhere for money and save.

@CraneFactory (Paul Cunningham) says:
@JohnChow that would imply ppl were overspending before the recession. We weren’t, so our spending has not changed.

@Bookerx3 (Bookerx3) says:
@JohnChow No, like Warren Buffet said "When people get greedy be fearful, when people are fearful get greedy"

@ltruex (ltruex) says:
@JohnChow I have reduced spending because I’m concerned that things will get worse and I don’t want to struggle if it does.

@buzzbishop (buzzbishop) says:
@JohnChow hmmm.. does planning a wedding, a trip to easter island and las vegas count as "reduced spending"?

@cutieissa (Melissa Solito) says:
@JohnChow re: recession — i reduced spending on WANTS but increased with NEEDS. we gotta drive the economy.. w/o spending, it wont happen

@CarmaSez (CarmaSez) says:
@JohnChow absolutely; we’re thinking twice when it comes to non-essentials

@theparadiddler (Omar Alvarado) says:
@JohnChow I didn’t have much to spend in the first place!


49 thoughts on “Has The Recession Reduced Your Spending?”

  1. I like you am looking to make 2009 the year of increased investments, if possible everyone should be looking to investmenst at this time as it is a prime opportunity for all provided it is seen as a long term investment and not a quick buck…

    1. I invested at the beginning of the recession when stock was super low. πŸ™‚

      1. For me unfortunately it has – I planned on buying a house this year, but it might not happen in favour of paying the tax man lol!!

        Certainly in Canada, the recession has not hit as hard as in the states – lucky us eh!

        1. Raitis says:

          I am spending less, because I was in real estate and mortgage consulting. As it is 100% stopped in Latvia, I try to do something else, but I still have many mortgages my self, so my incomes has lowered 3 times, but I still pay for my mortgage. So, my plan, is to increase my incomes. I am optimistic!

        1. Well malls are filled with window shoppers so you cant say that people are spending.

    2. SEO Tips says:

      Agreed. Real estate is set to keep decreasing here in the UK so within the next year or two everyone who is interested in property developing and real estate investing should be purchasing as much as they can.

      I wish I had the finances too because this is what I want to do however I am only at University.

  2. Not really. I don’t live luxuriously so I don’t feel there is a need to change my spending habits.

    Peter Lee

  3. It has decreased my spending a lot. Wish I never spent all that money on useless things in the past, so I would have more money now!

  4. Dot Com Moguls don’t worry about resessions.

    1. Kristijan says:

      Unless their advertisers suddenly ship out, like mine did on other websites…

  5. This is a very interesting topic. I really enjoyed seeing the twitter answers that was really a great idea. I meant to write a comment, but got to late in the evening. Though, I believe it’s sort of an attitude thing. Yes, we might be seeing slow down and even a recession. But, believe it or not there are still tons of people making tons of money. It’s how you want to address the situation you going to give in and say I can not make. Or are you start thinking creatively and start making some serious money like others are doing no matter what the economic reports say.

  6. Paul B says:

    I’m now spending a lot more, but on different things. I’m commited to putting half of my earnings back into my business where as before it would sit in the back earnings 8%-9% interest. I’ve got enough to live comfortably for at least 3 years so I don’t feel any pressure. Day-to-day spending hasn’t changed, was never one for wasting money so there’s nothing for us to cut back on as a family.

    Don’t want to sound full of it but from my own group of friends the only ones feeling any pinch are the ones that were out of control anyway.

  7. I agree I see no signs of a rescission. Every place seems to be busy, people are still throwing money away on frivolous things. So who really isn’t doing that well? Banks? Car company’s?? Businesses that are only making 1 billion when they think they should be making 1.5? Ouch yea that really hurts. If anything it’s made people a little wiser in their spending which is a good thing.

    1. Actually, almost any business that is even breaking even at this current time is considered to be financially strong.

  8. I spend less only because I’m trying to pay off debts. After that I’d probably be less strict about spending.

  9. Mike B. says:

    I am glad to see Sally does not let the recession bother her lol.

    @bookerx3

  10. pr massacre says:

    i try to live with spending as little as possible, so it hasn’t effected me that much. my income has suffered a little though.

  11. Jake Stone says:

    Critical mass of people spend almost all they make. During good times they get carried away and spend even more then when the bad times come knocking they just have to lower their spending.

    If only they would invest during good times that would already be an improvement. So, to many this question is very relevant, because their spending is immediately influence by economy trend lines.

  12. Tracy says:

    People who were smart and didn’t blow their money during the good times are now spending.

    And you do realize that all the Canucks tickets have been paid for from the beginning of the year right? I’m anxious to see if the NHL in general takes a hit in the summer when all these season tickets are up for renewal.

  13. Definitely am cutting back my spending. Things are going well for me, but just want to be prepared for the worst case scenario and have some funds in the bank to be able to fall back on.

  14. Pheak Tol says:

    my wife spends more than we can make it sucks cause even through this whole recession she still does it.

  15. John, just looking at the few pics you posted from your wweekend house shopping, I think you should do a blog post about the houses you’ve gone to look at!

    I myself love to see interesting houses and properties, and I’m sure others would as well!

  16. Infogle.com says:

    There is a consumer item which foods belongs too and this cannot be less in any regard – in whatever condition are you… and as you have stated you are seeing packed malls during weekend – there is also a word – “window shopping” which is more popular these days.

    How am i saying this… because if people were really buying the companies would not cut the staff – and their sales would have not went down drastically. Even some malls and big stores have cleaned out and gone out of business…

    so its a large difference between food and other items and also between the packed crowd and sale…

    πŸ™‚

  17. There’s one smart guy in those tweets that snuck in a link πŸ™‚

  18. Chef Patrick says:

    how many houses do you own? did own any in the US? looks like your always shopping for houses.

  19. Eh, it all depends on how you look at it, because people still spend money on things they really want no matter what is currently taking place in the economy. Even when I had no money and was practically broke, I would still spend depending on what the product was, although I’ve always been comfortable with risk…

  20. MLChelsea says:

    It’s difficult to not let the recession enter into my thoughts since everyone seems to be buzzing about it. However, I wouldn’t say that it has necessarily changed my routine shopping habits, although bigger purchases are more of a concern… I am holding off on a trip to Europe.

  21. I just made this one liner up!
    Recession Recession You’re everywhere, but I don’t see you in Malls and Stadiums, why aren’t you there? lol!!

  22. diabetes man says:

    If we can not making a lot of many cause recession, wise to manage the spending …very simple

  23. I actually spend more now. The things I usually buy cost more now and I can’t stop buying them because they are essential.

  24. Dunkel says:

    really is very hard in my country with the recession.. and good blog ^^

  25. SEO Tips says:

    This recession is definitely a strange one, although there is a lot of media attention on the recession and prices have risen in some areas of the International market items like computers and computer parts have decreased which has led to an increase in sales.

    With lack of demand price decreases, however for food items it seems to have increased due to inflation. I can only talk about the UK obviously but anything except food seems to have decreased in price and it seems people are not saving, they just spend.

  26. It hasn’t changed my spending. I do agree that now is probably the best time to start investments.

  27. I wouldn’t say my spending has changed (student life is pretty much the same most of the time). But I have increased my optimism quite a bit. πŸ™‚

  28. my personal spending patterns haven’t changed. My interest in the stock markets has increased as the current stock prices are a good basis to start investing there.

  29. Dan Stack says:

    You absolutely at all times must stay positive! Put your blinders on and look for opportunity, it’s everywhere right now! Especially in affiliate marketing…

  30. Gagan says:

    being a student !! i’ll say noo !!

  31. My spending has been the same as it was before the recession began..but I still buy into some of the great opportunities that are around because businesses are doing everything to survive including really reducing prices. Let’s also hope Sally never has to see a recession! πŸ™‚

  32. I wouldn’t say that I spend less, but I certainly spend differently. I put more money into developing business ventures and less into luxuries. It’s a matter of providing myself with as many layers of financial insulation as possible… and I think as far as the luxuries go, we all could do well to simplify a bit anyway.

  33. Ruth Sias says:

    Have to be more careful, yes…however, working full time from home creates lots of trade offs.

  34. Mike says:

    John, people might be forced to live on less, but they are not giving up on life. Of course, malls “entertainment” venues are active. I’m been hearing of reduced pricing on tickets to sporting events in the US.

    It’s a snowball. Housing is crashing (in Florida)…bringing down entertainment and services with it.

    What most people don’t realize about unemployment is the GAO only counts applications for unemployment, not people still unemployed whose benefits have run out. They’re still unemployed; they just not counted.

    Makes the unemployment rate look better.

    In Florida, I help people save their homes (loan mod or short refi) and walk away from homes underwater without debt collectors (short sales). Every day, I talk with people from all walks of life…all income brackets.

    For everybody not personally affected, congratulations…I hope your number is not called. I hope you’re able to create your own financial reality.

    Now more than ever, people need help getting back onto their feet.

    Cheers,
    Mike

    P.S. John, many Realtors today want to pretend houses are selling at such a discount today. Who cares what houses were selling for 3-4 years ago (in the US). They clearly were artificially inflated.

    The real deal today is discounted off today’s REAL value. I still hear some of my colleagues boast, “Look at this deal! It’s 50% off.”

    Big Frickin’ Deal πŸ™‚

    1. Stevo says:

      housing is crashing bringing down entertainment and services. . . but did you hear that traffic to Movie Theatres has increased 15% from the previous year? Talk about freakanomic reactions to save money.

  35. Doug says:

    Awesome post man. Has anyone else noticed how in the media and even on TV they are playing up the phrase “in this [tough] economy” ? Think about the negativity that outputs. Not everybody is having a tough time, just look at John. I wonder what effect it would have on the economy if they were always outputing sunshine and positivity.

  36. Ryan says:

    Spending less. Only because I’m spending more time writing articles and blog posts and watching my traffic grow without free traffic exchanges. Yay!!!

  37. I think especially Internet consumption and spending will increase during recession:

    http://www.wealthalchemist.com/Blog/2009/02/internet-usage-increases-recession/

  38. Linn says:

    Yes, we are definitely spending less as well… I think it doesn’t matter wherever part of the world you are.. spending less is actually a good thing IMO.

    nice read.

  39. Eling says:

    Comparatively, I need to pay more for my spending than before, because the company reduced income for the economic recession,the foodstuff which we need everyday higher than before.

  40. Stevo says:

    definitely spending less, having my credit cards boost the rates made me buckle down for the first time, and now I’m budgeted to the max, and paying on time to avoid more than late fees. And to explain why you see more people at the mall it’s really basic; regular shopper traffic – 10% out of the work force +20% increase in traffic for insanely deep discount shopping= positive increase in total shoppers and reasons the parking lots around New Jersey and NY are packed like Black Friday every weekend. . . it will subside once the inventory catches up and the sales and liquidations dwindle. Some people I know who make serious money try not to shop except for times like these, and now they are shopping all day long.

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