Financial Fasting
No one likes going on a diet, especially the fiscal kind. But as the recession hits us harder, can we learn to cut the budgetary fat without losing all the flavor of life? By Heidi Leonard
As “crisis”, “collapse, “recession” and—gulp, “depression”—are splattered across front-page headlines in 72-point font, it’s no wonder a quick trip to the ATM can leave us feeling anxious, and even a little guilty. Whether you’ve lost your job, are worried you might, or just find yourself on edge after your daily dose of despair-and-doom news, most of us have become a little more conscious of our daily cash outlay.
Well before “plunge” moved from necklines to headlines, psychologist Abraham Maslow offered up a “hierarchy of needs,” a kind of food pyramid of essentials for the body, mind and spirit.
Following Maslow’s lead, starting with fundamentals like shelter and sustenance (the wide base where grains live in the USDA version) and working up to personal growth and fulfillment (the high, happy peak reserved for sugar and fat in the food model), what do we cut when we put our spending on a diet? What can’t we live without? And can we learn something about ourselves in the process?
Don’t Skimp on the Basics
Kick-ass squatters from “Rent” aside, secure shelter ranks high as a priority for most of us. With foreclosures on the rise and credit harder to come by, housing is a source of stress for many—whether you rent or own. For successful Manhattan lawyer Rebecca Ebert, the satisfaction of buying her own apartment lost some of its sparkle with the downturn: “I’ve cut back on my spending, but I’m still scraping by. Effing mortgage.” Beyond bottom-line income and expense calculations, there is also a strong emotional overlay to housing choices for some. Saving to buy a house, Jodi Hoyt, a speech therapist with a toddler, says, “I worry a lot about not being able to give Jake a ‘home.’ ”
Food is also less comfort, more angst these days. Ebert is spending more time in her kitchen as she works to cover her mortgage. “I’ve been cooking a ton and I rarely eat out,” she says, “and I’m spending more time figuring out what’s on sale. It’s time consuming, but I’m saving money.” Not everyone, though, is willing to go without when it comes to the joys of (other people’s) cooking. Amy Wasserman, a pharmaceutical sales rep, recently reveled in a $105 plate of truffle-topped macaroni and cheese at the Waverly Inn in Greenwich Village (complete with photos posted in real time on Facebook). “It was too incredible to pass up,” she says. “I’m a big foodie and I’m totally willing to pay so that I can still eat well.”
Savings = Security
With even former Federal Reserve chairman Alan Greenspan experiencing a “state of shocked disbelief” over the current economy, there is no shame in not seeing this coming. But as we cut spending to make ends meet, are we putting our future security at risk?
“Younger clients especially are nervous,” observes Manhattan Financial Planner Sebastian Triscari. “They’ve only seen the last six or seven years of markets going up.” Smart recessionistas will—and this is a major bummer, we know—keep paying off the credit cards and contributing to the 401K. “I’ve made a serious effort to save and invest, and I live small, so I’m not really suffering yet,” says Katherine Rowe, a stuntwoman who takes non-financial risks (car crash, lunch, leap from tall building) for a living. “I’m sure I’m the exception, but I’m not that worried.”
Hoyt, determined to buy a house and create a home for her son, has found some solace in scaling back. “Saving even small amounts makes me feel more in control.”
Want vs. Need
Beyond basics, many report curbing their addictions to $4 cups of coffee, non-essential shopping and weekly mani/pedi’s. Carrie Durant, a banker on edge with much of the financial community, has stopped going to Starbucks. Corrine Imbert is living with “overgrown nails and bushy eyebrows.” And Rowe gets “less Botox than before.” Wasserman now buys $8 eyeliner at the drugstore. “I used to be addicted to buying makeup at Barneys and Bergdorf’s, but you know what? This actually works the same or even better.” Durant was also surprised by how easy it was to cut back. “I don’t miss shopping and buying clothes as much as I thought I would, which was a big eye-opener.”
Tracy Myers, an architect in San Francisco (more Zen than most after four months this year in India), has found that “stuff doesn’t bring happiness,” and “consumerism is sometimes a coping mechanism. “I’m trying to be more thoughtful about buying on impulse, and I try to re-use things when I can,” she says. Others have found that the act of buying serves less direct needs. “Trying to eliminate all unnecessary shopping is depressing for me,” says Paula Wallick, an assistant at a design firm in southern California. “It’s really a social outlet and a stress-reliever.” Wendy Baylor, an art student, is finding some middle ground. “I’m going to Starbucks less often, but I can’t give it up all together. I’ve started bringing my own cup though.” A little cheaper, a little greener.
Soul Splurging
So what about the “extras” that actually help our health? Do we ditch yoga along with Starbucks, even though one improves our body, mind and mood? Durant is pledging to make it to the gym on her own every day (“I’ll let you know,” she adds, “as soon as that starts”)—even as she mourns her prior life with a personal trainer. “I keep getting sick because I’m so stressed,” she says. Even Baylor, the art student, is finding the lure of so much televised financial gloom hard to escape. “Ironically, I probably tend to stay home more now and watch the news—which is depressing—instead of going to yoga.” Hoyt is keeping it simple. “I’m a lot more aware when I need to ‘just breathe’ when I feel stressed about money.” Good advice for all of us—air is free, after all, and therapy might not be in the budget for a while.
Heidi Leonard received her law degree from Cornell and practiced in the real estate departments of several large law firms. She now writes grant applications for the Mayor’s Alliance for NYC’s Animals, an animal welfare non-profit. She lives in Greenwich Village.
Tags: Being A Siren, budget, recession, shopping