plonkee money an english-er's thoughts on personal finance

October 5, 2009

are you spending less for no particular reason?

Filed under: philosophical — Tags: , , — plonkee @ 7:05 pm

Really, my life hasn’t been materially affected by this credit crunch / recession / whatever so far. I’ve got a new job, but that was because I made a career shift. My house is worth more than I owe on it (probably) but my mortgage is only 21% of my take home pay, so I’m not struggling to make the payments. I have as much money (if not more) in savings as I did this time two years ago. My investments are down, but I’m in it for the long haul, so that has no real impact.

And yet, I feel like I’m matching the overall mood. I’m not so inclined to go out drinking, I haven’t eaten out nearly as frequently as I used to, I haven’t been to the cinema in months, and I am much less interested in international travel than I would normally be.

Some of this is because I feel the need to improve my house (to both increase it’s value and to improve it’s functionality as a home). I’m saving up for things like new bathrooms and boring fixes to the fabric of the place. I’m also trying to bump up my emergency fund – I never seem to get past the mythical £6k figure. (Around 4-6 months expenses depending on how frugal I could be.) And some of this might just be me settling down a bit as I approach my 30th birthday.

I’m thinking that on a personal note, it’s not so much of a bad thing if I’m spending less and saving (and investing) more. For the economy, as a whole, it’s not so brilliant – although the investing is good – but we’re in a bit of a prisoners’ dilemma. In any case, I’m not really cutting back deliberately, I’m cutting back because intuitively it feels the comfortable thing to do, and I can’t think of a logical or objective reason to spend more.

Is anyone else spending less in the recession for no particular reason? Or have you felt the effects more directly and are adapting? I guess it’s sort of consumer sentiment thing, but there must be a name for this sort of phenomenon. Let me know what you think in the comments.

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