Who is affected by cutting back? It’s not only stores that feel the pinch. If you decide to borrow movies from the library or swap DVDs with a friend the video rental store loses revenue but what about when you decide to use your babysitter less or cut back on other services?
People who rely on a regular customer base for services are suffering as other people cut back.
Susan Reimer really sheds the light on this issue in “Pinching Pennies Pains Us All.” This is true. I never really thought about if I chose to get one or two fewer haircuts or use services where the person doing the service gets the majority of the money.
Though I don’t have a lawn service I do try to cut back on dry cleaning expenses by wearing a washable t-shirt under a wool sweater to extend the time between cleanings. I have tried to do other things.
The economy has already take a hit and things are changing in ways that economists never figured. Yes, some people have acute brand loyalty but others have discovered new brands and a resurgence of quality. Instead of just looking for the cheapest item, people are looking for quality items that make a difference. If you are spending a few pennies more but you know that you are getting better quality and satisfaction or if you are spending a few pennies less and the quality is about the same then guess who wins. The less expensive product/brand.
It is already known that people have pulled back. How far the pullback affects those in your neighborhood or people whose services you depend on makes a difference.
Our economy is sick because two thirds of it requires people to spend to keep the pipelines flowing. When people slow up their spending, then the slow down is apparent and makes things more difficult. Retailers know this but what about other people like manicurists and hairdressers, babysitters and cleaners? They are on the frontlines and when we spend less with them, they have less to spend for themselves and their families. There is no true solution for this especially then the basics like food and gas are increasing.