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This is a very interesting article and video (link below) about how the current recession (depression?) is going to most likely have a permanent effect on the average American's lifestyle.
Discussion: After reading the article and watching the video, discuss how you've changed your habits lately, if at all. Saving more/spending less? Scaling down the house or car? Shopping in more discount type stores? Or, you're still chugging along as per your old usual ways. Keep the discussion CIVIL AND POLITE - terms of service rules apply here as always.
Aside from the fact the financial expert sounds like a stereotyped character from Seinfeld, I think he has some very valid and accurate observations. Story - HERE.
I think for most of us, it's a reality check......too many people for far to long have been living way beyond their means. Time to wake up and realize, what is really important!
Over the last 20 years or so, two lifestyles have became dominant in the US: the poor and the upper-middle-class.
The poor don't have, nor have they ever had, many options; they do what they can to get by.
Everyone else pursues an upper-middle-class or pseudo-upper-middle-class lifestyle. The working and lower-middle classes move further and further out into the exurbs, or South/West until they can afford a pseudo-upper-middle-class home. Ironically, the upper-class, who once modeled their lifestyle on the aristocracy of Europe, tend to trade-down, eschewing servants and a formal lifestyle, and adopt upper-middle-class tastes (the eat-in kitchen and family room over the formal dining room and living room).
The old, middle-class lifestyle of the 50s with one car for the family and siblings sharing a bedroom is now the upper-middle-class lifestyle of a bedroom for every child, a car for everyone old enough to drive, etc.
When individual items like clothing and housing were comparatively expensive (in the 40s and 50s), lifestyle-class was defined by quantity, i.e., how much stuff you had. Now when things are comparatively cheap, because they're imported from China, etc., lifestyle-class is defined by quality. Everyone can have a closet full of clothes: some will have a closet full of Saks and some will have a closet full of Target. Everyone can have a 4-bedroom (or more) house: some will live in a desirable neighborhood with a short commute and some will live in the middle of nowhere and have a very long commute. What are the main differences between a house in LA-proper and the Inland Empire? Length of commute and quality of construction, not interior square footage.
The question is: is this sustainable economically and environmentally?
If the recession becomes a depression, I suspect many families will find the pseudo-upper-middle-class lifestyle unsustainable and may revert to the old 1950s model. I don't know if this is a bad thing, but I know it will be painful.
I've really stopped spending, even though absolutely nothing has changed in my life, and I have absolutely no debt to speak of. I think people need to stop spending everything they have and think a little of retirement and savings.
People who are baby boomers now tend to have a LOT more savings than people in their 30's and 40's. I don't mean because they're older, but there's a general shift in how people save today compared to 30 years ago. The younger generations don't save, they just milk off the huge assets of the baby boomers in a lot of cases.
I think this recession/depression will have a very lasting impact on the American lifestyle. Many Americans including myself are not spending the way we did before even though my situation hasn't changed and I will be getting a raise at work in the next couple of weeks.
I'm saving as much as I can right now for a secure future. I have everything in life I want at this time. I'm concentrating at building up my retirement nestegg, saving for my move out of state and mostly concentrating my energies to be debt free in a couple of years, except for a small mortgage.
I think we already ARE in a depression. They keep comparing what's happening now to the great depression of the 1930s. This isn't the 1930s. The World, and America, are vastly different now than what they were then. The whole definition of "depression" should be reconsidered, and if so we may find that in today's world - we are already well there.
Quote:
Originally Posted by tpk-nyc
I suspect many families will find the pseudo-upper-middle-class lifestyle unsustainable and may revert to the old 1950s model. I don't know if this is a bad thing, but I know it will be painful.
I think there will be some folks who will quite literally react to this like drug addicts or smokers trying to quit their "habits". Atlanta is one city that in the past, articles have suggested has a certain number of people who are "addicted to buying". Shopping is actually considered to be a hobby by many, here. Once they realize they can't continue to boutique-it every few days anymore and eat out in nice places every night, they will literally have withdrawal symptoms.
If anyone is in college to become a psychotherapist and about to start your own practice, you're about to get very busy.
I don't think we're in a depression, and I don't beleive that we will sink into a depression. I beleive that we'll find a way to dig ourselves out of this mess, but it won't happen overnight.
Personally, my habits have not changed drastically in this recession. I have always lived within my means, so my spending habits have basically remained the same. I just went on a vacation to Florida earlier this month, and plan on taking another trip this summer.
I'm not going to stop living life just because there is an economic slowdown. I've been watching my money flow a bit more carefully and have tried to make good financial decisions, but I won't join in with the doom and gloom crowd. Life is too short.
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