Recessions aren’t too bad if you don’t lose your job. Gas prices plummet, restaurants push inexpensive dinner options, and your dollar really does go further.
So while it may seem like the world is nearing its end, there are always a few things that make an economic slump a little more bearable.
Common Sense Back in Style
Recessions are great for bringing back common sense. For example, I ran into an article on low-cost investing options and an on-going fee war in ETFs. There isn’t much to read in the article, save for this small statement buried inside:
Over the five-year period through June 30, the firm’s assets grew 40% to almost $1.7 trillion. Meanwhile, overall industry assets grew just 10%.
The “firm” is Vanguard – the least expensive fund company on the planet. It’s good to see that people are following probably the most well-known rule in the world of personal finance: all else being equal, go for the least expensive option.
And so this got me thinking about all the changes I’ve seen since the bubble burst back in 2008 and 2009.
Less Stupid All-Around
- No more rentals! – I haven’t seen an ad for rims or purse rentals in a very, very long time. I remember back in the bubble years daytime TV was loaded with ads for businesses renting everything that people couldn’t afford outright. Sure, you can still find a Rent-An-Everything on every corner of every inner city block, but the rental stores for expensive purses and car rims are long gone. What are $500 purses and $2,000 rims really worth if you couldn’t afford to purchase either one in the first place?
- Banks are out; credit unions are in – This is a fairly recent change thanks to the Occupy Wall Street movement, but credit unions are the obvious choice for most people who run into common banking fees. I’m just happy to see people actually think about who holds their money every day.
- “Staycations” vs. Vacations – My own purely anecdotal evidence leaves me to believe that vacations financed by credit cards are probably out. Like a fool, I went to a theme park on a Saturday only to see it completely packed. Just two hours after the park opened, the cars were packed all the way to the three last rows in the parking lot. I’ve never seen it so busy, and I have to think that people are now comfortable enough to spend a little on pleasure, but still concerned enough to write off week-long stays on “brand name” beaches.
- Generics are everywhere – Part of this is on the business end – retailers make more on private-label products than brand name goods – but I think a lot of it has to do with a changing mindset towards commodity goods. I’ve noticed far more private-label products on store shelves, which would lead me to believe people have finally taken notice to the fact that $6 Motrin is no different than $2 ibuprofen.
These are just off the top of my head – I’m definitely missing a few. Have you noticed any changes in the way people manage or spend their money?
JT is our staff writer extraordinaire. He's an entrepreneur and has been a financial blogger, and writer many years. In that time he has covered topics ranging from international macroeconomics to the domestic (U.S.) financial markets, to basic personal finance.