I am doing the best financially I have ever done and I am doing something similar with my gf. We are keeping it around $100. It's funny, the more you have, the less you feel you need to spend on consumer crap. Much rather take a good trip somewhere, buy a few nice things that I derive a lot of value from and amass excessive cash so I never count myself amongst those enslaved to the banks. Also, if you find a gf that is not interested in material things or the size of your bank account you have a keeper!
AP- Poll: Debt turning shoppers into Scrooges AP WASHINGTON â A lot more Americans are feeling stressed out by debt this holiday season, raising the glum likelihood they'll behave like Scrooge rather than Santa. In fact, fully 93 percent say they'll spend less or about the same as last year, according to an Associated Press-GfK poll. Half of all those polled say they're suffering at least some debt-related stress, and 22 percent say they're feeling it greatly or quite a bit. That second figure is up from 17 percent just last spring, despite all the talk about economic recovery. Most people â 80 percent â say they'll use mostly cash to pay for their holiday shopping, and that generally means buying less. For example, Joy McGavin, 26, of Pittston, Pa., says she will cut back on holiday gifts by a few hundred dollars this year and pay for everything with cash. "Family â nieces and nephews â we won't be able to afford this year," says the stay-at-home mother of three. They now shop at Big Lots â not Wal-Mart. "They're too expensive this year," she says. Her husband, Robert, had been working two-full time jobs, as a mechanic at a garage and at an auto parts store. Recently his retail job was cut back to part time. "We don't have as much as we had last year," McGavin laments. They don't have health insurance and have racked up major medical bills. Diane Morrison, 57, of Flemington, N.J., says simply, "I'm going to cut back." She's clipping coupons and "looking for big sales." She owns a payroll company, and many of her clients are laying off workers. Some of the companies are folding, she says, and "I'm feeling more stressed because I feel my income will go down because of what's happening with my business." Morrison and the McGavins are hardly alone with job problems. Unemployment has rocketed past 10 percent for only the second time since World War II, making it harder to pay monthly bills. Home foreclosures have spiked to record highs, and defaults on credit card debt are rising. What does that mean for retailers in their most-important season? "Cash serves as a very direct governing force upon spending," says Dr. Alan Hilfer, director of psychology at Maimonides Medical Center in Brooklyn, N.Y. "If you have $100 in your pocket, and that's all you can spend, you'll look around and make a decision based on the amount of money you have." Credit cards, on the other hand, allow people to make more impulse purchases. In the survey, people who intend to spend less during the holidays reported suffering from higher debt stress than those who plan to spend the same or more, said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the results. Those who plan to use cash to pay for most of their holiday season purchases have higher stress levels, he said. So do those who will carry over at least some of their holiday season credit card charges because they won't be able to pay the bill in full when it arrives. Hilfer said that when debt increases and becomes a focus of anxiety, it forces people to start thinking more long term. "They won't allow impulse buying and won't splurge as much because they are thinking that next year they may need to have the money to fix the motor on the washing machine, so they can't spend that money now," he said. How consumers behave during the holidays and beyond is a critical force determining how strongly the economy snaps back from the worst recession since the 1930s. Consumer spending is the single-largest driver of overall economic activity. The traditional kickoff of the holiday sales season is Friday â the day after Thanksgiving. This time of year is crucial for merchants, accounting for up to 40 percent of their annual sales. The National Retail Federation believes holiday sales will decline this year, but the drop won't be as steep as last year when the country was deep in recession. Looking to next year, consumers won't be in much of a mood to go on a shopping spree because of high unemployment and tight credit, according to the National Association for Business Economics. Consumer spending will rise a lackluster 2 percent next year, restraining the recovery, NABE forecasters said. Unemployment now at 10.2 percent, will average 9.8 percent. For people who do plan to charge their holiday purchases, 75 percent say they'll pay off the charges in full when the bill arrives. The average amount owed on credit cards is $5,600, the poll said, up from $4,900 in the spring. More broadly, people carry an average of about $46,000 in debt â mortgages, credit cards, auto loans and other consumer debt. That's a far bigger load than in the early 1980s when the jobless rate last topped 10 percent. In 1982 per capita debt totaled about $14,000 in today's dollars. The AP-GfK poll involved interviews with 1,006 adults and was conducted Nov. 5-9. The margin of sampling error was plus or minus 3.1 percentage points. ___
You couldn't move on Michigan Ave in Chicago this past weekend with the crowds. And the number of bags coming out of American Girl Place was astounding. Time will tell, though I bet for many Christmas will be cut back substantially. People are worse off this year than this time last year as the crisis just began to really unfold. More have been out of work all year and are in the mode to not spend and pay down debts.
I'm an example of a still employed grad. Decent salary too. My employer has done layoffs 2 years in a row. Current employees have had no salary increases for 3 years. Second year no Christmas bonus. No college assistance (used to have it, working on Masters.) Retirement was decent defined benefit plan, now employer contributes 2% to a defined contribution plan. I have to contribute 11% more to keep pace with the previous defined benefit plan. Glad I have a job, but when it comes to being a consumer, my family consumes staples, period. Kids dance lessons and sports is about only extras. Christmas spending is reduced by 2/3 this year. Was $900, now $300. Counting the employed as consumers is a mistake economists are making. The average American family with college degrees still employed are in debt. These families are waking up to the debt problem or will be crushed by them before the end of 2010, employed or not. Many of us are saving, saving, saving... and paying down debt as an investment. Revenue for black Friday will be very good compared to low expectations. Profits for black Friday we won't hear about because for once stores will really take a profitability hit to generate revenue. It's all a numbers game to make us "feel like everything is OK."