Spending Diet

There’s a new diet fad in America. No, not the kind that helps you lose weight (although I may take up that subject in a subsequent post as for some reason being unemployed and poor has led to a personal weight gain). The diet that is the subject of TV talk shows, articles in the NY Times, and blog posts is a Spending Diet. The recession has clearly gotten everyone’s attention and the nation is responding by keeping their wallets in their pockets. Even while we are tentatively venturing into a recovery, we remain cautious. Housewives clip coupons, families cut back on purchases, and businesses are reluctant to spend on rehiring. State governments are getting into the act as well, weaning themselves of the tendency to borrow, and cutting spending – sometimes in austerity programs that are painful to their workforce and the population relying on government services.

Here are a few examples of the variations of the spending diet. Oprah’s is called a Debt Diet and she’s enlisted various financial experts to help set America on the path to financial freedom. She begins with figuring out how much you owe and creating a plan to deal with it and at step 4 she hammers home the main point – STOP SPENDING! She follows three families who are on the debt diet – one of whom begins the diet with a debt of over $100,000! 12 credit cards all maxed out. Wow. If this is in any way representative of the typical American family I can see why spending diets are in fashion. I don’t have any credit cards (and can’t imagine anyone giving me one in the future). I used to have several, all with fairly high limits and a few with fairly high debt (adopting abroad and moving to another state within a year is expensive). Thankfully most were paid off before we lost our home and my job!

The article in the New York Times that caught my eye this morning was a story about a group (fairly small at this point) of people who had decided to subscribe to a fashion diet. For one month they would select and wear 6 items or less from their existing wardrobe. Mind you underwear and shoes don’t count. This is not an idea that will catch on in Wisconsin in the winter where you add at least 5 pieces of clothing just to go outdoors (hat, scarf, coat and 2 mittens) which would leave you with very little to wear to work! But maybe outdoor wear doesn’t count either. The comments on the story were revealing – apparently in communities other than New York there’s a large segment of the population that doesn’t agonize over what to wear every day, nor spend $5,000 to $10,000 a year on clothing (like one woman profiled in the story). Granted most were men, but any number reported that they get by on pretty much the same limited set of clothes every day. I certainly fit into this category. I have 2 pairs of jeans that fit, one polo shirt and a couple T-shirts. Those, and a much worn pair of loafers, make up my wardrobe most days. Now I do still have other clothing tucked into the small cabinet in the RV – interview and work clothes that I withheld from storage thinking I’d be putting them to use before long. But they are just taking up space. And I admit I also have a pair of pants I’ve regrettably outgrown, a swimsuit I won’t be seen in, a jacket too warm for the current weather and a pair of running shoes (that don’t get enough use). One woman in the article has “72 pairs of active shoes.” Active meaning the ones she wears, not those stored in boxes! She also has a wardrobe for her dog however so I suspect (hope) she isn’t representative of most Americans!

For some folks, much like the fellow who is spending a dollar a day on groceries, it’s not just getting out of debt, but spending less in general and staying on budget. Midlife Mom is spending a month spending less and recounting her efforts on her blog. Her goal is to spend no more than $1,500 (excluding mortgage, fixed bills such as utilities, charitable contributions, and savings and investments) in the month of July. She’s not only succeeding but she’s doing it without feeling deprived. And she thinks she can keep it up. As one of the financial experts on Oprah said diets only work if the changes you make in your eating or spending become ingrained.

And just as there’s a Weight Watchers for folks wanting to watch their calories, there’s a Wealth Watchers for people who want to watch their money! The goal of the Wealth Watcher’s program is to help people spend less money than they make. At the heart of the program is one simple calculation: your Daily Disposable Income (DDI), the money you can spend each day without going into debt. Like Weight Watchers the program requires participants to keep diligent records tracking their income and spending on a daily basis.

How is it that these spending diets and wealth watching programs are becoming so popular? Well, simply put we appear to be a nation that has forgotten or thrown over our puritan roots. Lessons learned by our parents (or more likely grandparents) during the Great Depression have been cast aside as irrelevant. In 2005 the Christian Science Monitor published an article titled “Spendthrift Nation” in which they reported,

“Americans have stopped saving for a rainy day. Instead, they are living paycheck to paycheck, depending on credit cards to get them through emergencies, and hoping that the rising value of their homes will give them a retirement nest egg…
“In two generations it seems that we’ve lost the culture and habit of savings,” says Nancy Register, of the Consumer Federation of America. “There’s so much marketing pressure to spend and buy and have instant gratification. And if you can’t buy it now, put it on your credit card.”

Clearly we now need to break the buy and borrow habit, and the spending diet trend suggests that Americans have cottoned onto this. But have you noticed that the litany of “BUY, BUY, BUY!!!” in advertisements hasn’t stopped? The manufacturers and marketers continue to beat that drum, insisting we need the newest version of whatever electronic toy or game with which we are enamored. Umm, iPhone 4 anyone? You NEED it (even if it doesn’t get good reception)! Does anyone make things to last these days? And what further damage would be done to the American economy if they did? If people didn’t feel the need to replace their car every 4 or 5 years, if computer and cell phone hardware didn’t need to be new in order to keep up with advances in technology? Why think of the jobs that would go away, the money that wouldn’t be injected into the economy! What a conundrum!

Well, I’ll leave the Brave New Economy to the economists but I do hope some of them are thinking about the issue.

We are also spending less here, by necessity rather than choice. Although a proponent of a simple life I never really managed to kick the ‘stuff’ habit before being forced to downsize to the RV. I liked shopping – especially for home décor, toys, and food. To me those things meant pleasant surroundings, entertainment for the kids, and the comfort of knowing we would never be hungry. I enjoyed window shopping as much as buying and could happily kill an hour browsing through stores like Pottery Barn and World Market. I think some of that came from undergoing a period of uncertainty in my childhood so I suppose I’m raising another generation of emotional shoppers! Sigh. These days I avoid stores –even sales flyers make me unhappy – all those unrealizable bargains! But between the necessity of being thrifty and helping my friend who has a liquidating business and buys up the things someone else sought, bought and stored, but couldn’t keep, I have found my desire for possessions waning. I might not be able to get by on 6 items of clothing but 8 or 10 – no problem!

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10 Responses to Spending Diet

  1. Sharon says:

    What a great post. Thank you for your shout out! (the link, however, goes back to the NY Times article).

    This has been a challenging month for me, but I know that I can do even better. Next month, I’m thinking of trying a harder challenge….minimum wage…stay tuned!

    I’m very impressed with how you are managing. Dignity and perserverance. Your potential book deal reminds me of what happened with R.J. Rowling….she was poverty stricken until her Harry Potter books were published…

    It’s going to be your turn…soon!!!

    • boxcarkids says:

      Thanks – I fixed the link (sorry about that)!

    • Lynn says:

      There was an interesting book a few years back called I think”Nickeled and Dimed”, by a woman who wanted to see what it was like to live on jobs like diner waitress, Wal-Mart greeter and such. Very interesting. If I recall correctly, she entered each situation as a “just moved to town” person and had the housing that she could afford on that pay. It was not just the economics but the cultural change as well, that was thought provoking. She did it as a single woman, though, not with children, which would make it infintely more challenging.

      • boxcarkids says:

        Thanks Lynn. Here’s a blurb from her website (author was Barbara Ehrenreich – there is a link to the book on my recommendations page):

        “Millions of Americans work for poverty-level wages, and one day Barbara Ehrenreich decided to join them. She was inspired in part by the rhetoric surrounding welfare reform, which promised that any job equals a better life. But how can anyone survive, let alone prosper, on $6 to $7 an hour?

        To find out, Ehrenreich moved from Florida to Maine to Minnesota, taking the cheapest lodgings available and accepting work as a waitress, hotel maid, house cleaner, nursing-home aide, and Wal-Mart salesperson. She soon discovered that even the “lowliest” occupations require exhausting mental and physical efforts. And one job is not enough; you need at least two if you intend to live indoors.”

  2. Chris says:

    Thanks for sharing this. I do sometimes wonder how all of this spending diet talk sounds to those who cannot spend beyond the barest necessities.

    As to the conundrum of what happens to jobs when people spend less, I always figure that staying out of debt actually raises my ability to spend. My money goes to merchants and manufacturers, those providing services etc. rather than to lenders and banks. I suspect that it produces more jobs that way but I’m not an economist.

  3. Becky R says:

    I have for my spring summer wardrobe:
    1 denim skort (I wear it almost daily)
    1 pair capri’s I can wear outside the home
    1 pair of capri’s I can wear in the home (unrepairable rip)
    1 pair shorts
    a few blouses
    a few t-shirts
    sandals I can wear to church (but not comfy at all for eveyday wear)
    sandals to wear at beach or park (not nice for church)
    sandals I love but if my mom knew I still had they’d be trash (I wear at home)
    one pair sneakers
    socks
    a few tanktops that I wear under some of my tees
    2 braas (and not in great condition, I so need new ones)
    a bathing suit that I can only wear with shorts and a t-shirt over (It is falling apart)

    I feel so blessed to have even these (plus a washer and dryer to clean our clothes with.) I have not bought any new clothes for myself at all in 2010.

    All I have bought my boys in 2010:
    each new bathing suit (on clearance)
    each pair of sandals ($5 each on clearance)
    underwear for younger son (online bought 12 pairs under $10)

    I think it is so good Americans are going on these debt diets. Debt is crazy. Borrowers are slaves to debt.
    I am so thankful I have no debt (except my mortgage.)

    I also avoid stores and even sale circulars. I do frequent freecycle, but mostly to give stuff away.

    We all have too much stuff, so I am glad many are using that stuff instead of buying more.

  4. V's Herbie says:

    I don’t think I’ve purchased 72 pairs of shoes! Maybe if you count all the shoes I went through growing up.

    It’s hard for me to read all those articles on choosing to spend less.. the numbers are just too depressing. They always seem to discount all the expensive stuff and then set the spending limit.

    Totally out of touch with the reality of a limited income.

  5. Pennie says:

    It is my hope that our society has finally grown tired of the empty role of being nothing more than “consumers of products.”

    There is a cringe factor for me when I hear the wonks spinning that in order to get the economy healthy again we as citizens need to go shopping and spend…

  6. Betsy says:

    72 pairs of active shoes? 72??? I am not sure all of us combined would hit that number….sheesh!

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