Is your spending in line with your income?

Even though there are many people who are saving money and espousing frugality, there are also people who are spending – just fewer of them.

The Bureau of Labor Statistics indicates that the current rate of unemployment is 8.1% as of February, 2009. There are still many people who are employed and making purchases.

But are those purchases in line with their income? I heard a woman say that there are no secure jobs anymore. There are some jobs that are more secure than others, yet having job security does not mean that spending should go uncapped. We have all heard of recommended minimum amounts that people should save yet if everyone paid their bills and saved some with money left over is there a recommended amount that people should spend on discretionary purchases?

Convenience and cost have made many relatively happy to spend on small indulgences, like coffee, dining out and inexpensive clothing & accessories. Now that the cost is more of a factor when people want to save, convenience stores which offer snacks, drinks and other goodies on the go are suffering as well. Thrift stores are booming in the clothing and accessories sections. The other sections, such as books and housewares haven’t seen people bustling to buy as much in the used goods trade.

When people make more, they have more discretionary spending available: More money, more to spend, and more to buy.

Investopedia defines disrectionary spending as: 

…an important part of a healthy economy – people will only spend money on things like travel, movies and consumer electronics if they have the funds to do so. Some people will use credit cards to purchase discretionary goods, but increasing personal debt is not the same as having discretionary income.

A healthy economy would mean spending within limits only if there is enough money there. How much is enough to have for discretionary purposes? And do you have to spend all of your discretionary funds?

Gas and food prices took a big chunk out of discretionary spending, but now that gas prices have almost halved off of their all time highs and managing at the grocery store what will this mean for the economy and unnecessary items?

People are still drinking coffee just not buying it from coffee shops. The economy has made people decide that hey taking the extra few minutes to make coffee at home, is better than spending a lot for a cup of coffee every day. Being seen drinking coffee with a certain cup is not as cool as saving money.

What if people who would buy coffee normally just aren’t because they aren’t employed? What are you spending on coffee? When it comes to spending time or money… some are choosing to spend time so that they can save money. The phrase time is money has more meaning now. People are taking the time to save their money and doing things for themselves. Cooking and making coffee are ways that people can save money while still taking care of some needs. Not everything thinks of coffee as a necessity. Even drip coffee  is cheaper to make at home, and doesn’t take that much time. Plus, if you are in a coffeeshop, you often feel as though you should leave a tip. At your own home, you don’t have to tip yourself, unless you’ve done an exceptional job.

“Consumers still see coffee as an integral part of their everyday lives,” said Robert F. Nelson, President and CEO of the National Coffee Association. “Even if economic conditions cause some to alter their coffee choices, they are nonetheless continuing to enjoy coffee at levels very much on par with recent years.”

Three percent fewer people are drinking coffee outside which is a cause for alarm for coffee places, yet could be a boon for the frugal person’s wallet. A higher end coffee maker and insulated travel mug will definitely pay for itself in a short while.

People are spending a lot more time at home.

What they are cooking I don’t know? Grocery stores aren’t even that crowded anymore, even the ones that are not near public transportation. The gardening bandwagon has just started and it hasn’t been warm enough to plant anything in Northern Illinois, let alone harvest anything yet.

What has been happening?

Near college campuses, restaurants and coffee shops still seem to be doing a brisk business.

Some stores have been reducing the amount of items that they offer, which makes it seem as they are either going out of business or going for a high end empty shelf boutique look. There are fewer items on shelves and fewer choices.

I had gotten used to having a lot choices in stores when I went shopping. Now there aren’t as many things being carried because stores don’t want be stuck with the merchandise. Especially if it is perishable merchandise.

This Gallup Poll shows that consumer sentiment has improved but people are still holding on to their cash. Things are so uncertain many are just waiting to buy what is necessary. The data also showed that people were still spending, just spending less when they did go out or buy necessities.

I received a sample of Starbuck’s Via instant coffee in the mail. I tried one packet and my father who also loves good coffee tried the other.

Neither of us were excited about the instant coffee which is sad because I had high hopes for it. It still had that freeze dried taste of instant coffee. The advertising for it and promotions are great but the coffee itself isn’t. There’s still that freeze dried quality to it. If I’m in a rush, I would rather get some regular coffee in a French press pot or brew mug.

The cost wasn’t an issue but I knew when I added creamer to mine after the first couple of sips that this wasn’t working for me. I prefer my coffee black. My dad said “that instant coffee and I aren’t going to work.”

Anyone who has tried Via, speak out! What did you think?

Many people are angry because of AIG. Is it possible the AIG is also the scapegoat? There are other companies that have given out six figure bonuses but they haven’t taken money from the government when they do.

 

Here are some other things that we should be upset about.    

If you have assets but don’t want to spend them, you still have them. Some people have nothing in the bank to draw on.