On some level, I'm relieved to see people cutting back. Our current consumer economy is unsustainable from both an environmental and economic perspective. As many have said before me, we were once citizens, we are now consumers. Consumers, to me, sounds unpleasant in the way a swarm of locusts is unpleasant. Whereas citizens - engaged, upright and thoughtful - is a term I can get behind.
But (you knew there was a but here, didn't you?) economic downturns have a negative impact on everyone, even the frugal wash-out-your-baggies types. And while market corrections have their place, the fallout can be very personal. It's hard to get behind an economic downturn as part of a necessary cycle when you are the one in the unemployment line.
And that very personal perspective is the one that I think are the most important. Still, it's not time to panic just yet. We are by no means in the Great Depression II yet. We still have some positive opportunities financially, all of us.
The first positive opportunity is in your IRAs and 401ks, and any other investments. Prices are down, so you can buy more. That means that if you get more shares now, when the prices go up, you do better. That said, this is a good time to go to morningstar.com and check your portfolio. If it needs a few changes, make them. Then sit it out, especially if you have a lot of time before retirement.
The second positive opportunity is that there is going to be much less pressure to spend. Chances are, if you feel a pressure to decorate your house, or get a flat screen TV, whether that pressure is internal or external, you now have the perfect excuse not to buy. Ride out the economic uncertainty by putting off non-necessary spending for a bit. I promise you'll live, and you might even be happier.
The third positive opportunity is to pay down your debt. Especially if you are one of the ones without job security. Chip away at it, don't add to it. The smaller your debts, the less you have to fear. So if you are afraid for your job, save some, yes - I hope you've been saving all along, but really focus on owing as little as you can to as few people or institutions as you can. It will be a huge relief if the axe falls on your career for a bit to know you can stay afloat on unemployment.
The fourth positive opportunity is that mortgage rates are down. That means if you want to buy a house, it's a really good time for you. And if rates are a percentage point or more less than when you bought, consider refinancing. Even with the fees, it may be worth your while. Crunch some numbers and see.
The fifth and final opportunity I see is to take some time to find inexpensive or free things to do with your time. Maybe that's taking walks on the weekends with your spouse, or cuddling up in front of the TV for the evening instead of the movies. Maybe it's training for a 5k, or simply finishing that quilt you started eleventy-seven years ago. Do all those things that you talked about doing, the ones that don't involve being first in line for a first run movie.
Sure, the economy is not doing well. And yes, you may have some things to worry about. But see the opportunities through the negative press, and not only will you possibly be wealthier, but happier as well.
Now, aren't you thrilled Apple stock is more affordable?