Will Frugal Living Last the Recession?

This recession has resulted in an increase in the personal savings rate . Many people are discovering that it is necessary to be frugal . However, Wise Bread asks an interesting question: “Will ‘forced frugality’ last?”:

But will the newly frugal carry their current survival tactics past the current economic malaise?  Will they realize that living on less is easier than they once thought? Can they learn to enjoy saving money and living a simpler life?  Or will forced frugality continue to feel painful and restrictive, so that they’ll jump right back to their old lifestyles once they could afford it again?

It’s an interesting thought. Many of us are finding that it is necessary to cut back in order to accomodate loss of hours or outright lay-offs. In many cases, people haven’t yet lost income, but are still concerned that it might happen and are therefore preparing.

Fear is a great motivator, but, as my husband tells me (he’s working on a Ph.D. in experimental psychology), fear is only a great motivator in the short term . Once the fear subsides, so does the motivation. Is that what will happen as things change in the economy. As the economy regains its footing, and as people begin to feel more secure in their personal finances, what will happen?

Obviously, it would be best if everyone continued to practice frugal living . It would promote increased savings and even investment. And it would ensure that personal finances were reformed in such a way as to make the next downcycle less devastating for those affected.

Image source: Jon Sullivan via Wikimedia Commons