Frugality becomes the norm this year

Associated Press

NEW YORK – The political and economic uncertainty following the Sept 11 terrorist attacks has brought out a trait not usually associated with baby boomers: Frugality.

“I’m worried. It’s worrisome to me. I don’t know what is going to happen. People are getting laid off … I am not in a state of panic, but I am going to watch things,” said Sara Natoli of Westbury, N.Y.

The teaching assistant said she’s cutting corners by packing her lunch these days along with those for her three children. She’s carefully weighing bigger expenses.

“I was looking for a couch for the longest time, and now I am not going to do that for the next few weeks … or I am going to really research and make sure I get a value for my money,” Natoli said.

While not all boomers, known for spending freely and saving less, are brown-bagging it, some say the events of Sept. 11, which have resulted in thousands of layoffs, have inspired them to take a closer look at their finances.

Some boomers say they’re worried about how much the already weakened economy will suffer or about national security as the United States retaliates for the assaults that destroyed the World Trade Center and a portion of the Pentagon. Such fears, along with an impulse to cut back spending, are natural in the face of a crisis, according to experts.

“People take stock. They say, ‘What do I need to do to respond to this? … What do I need to do to adapt?’ ” said Ray Forgue, associate professor of family studies at the University of Kentucky.

Others say it doesn’t feel right to be shopping or eating out when thousands have died or have lost loved ones. In any case, boomers, those 76 million Americans born between 1946 and 1964, say they feel better hanging onto more of their cash.

“It doesn’t feel like a time to be frivolous,” said Vicki Tucker, of Smithtown, N.Y.

Since the attacks, Tucker, a professor of health care at Long Island University and a hospital executive, hasn’t bought any clothing, has had few dinners at restaurants and has cut in half the amount of money she withdraws weekly from her checking account.

“I am one who loves clothes, and I haven’t purchased anything since. … Plus, I am graduating this coming weekend with my Ph.D, and I haven’t purchased anything for that,” Tucker said.

Other boomers said they will continue to make careful financial decisions.

“We’re not going to buy any brand new cars. But we’re also not pulling our money out of the stock market and putting it in a coffee can under the bed,” said Karen Rosencrance, a homemaker in Waunakee, Wis.

Financial experts agree that the economic and political uncertainty warrants some frugality. After all, Americans are carrying close to $1.6 trillion in consumer loans, a debt that is costing them about 8 percent of their take-home pay to service, according to the Federal Reserve.

“The reality is we just don’t know what is going to happen. … People should be really cautious with their spending right now. Americans have tremendous debt going into this,” said Jordan Goodman, author of “Everyone’s Money Book” and a writer for Money magazine.

For boomers – or anyone – looking to be more frugal, financial experts suggest getting started by tracking where the money goes.

“A lot of people have no idea where they spend their money. They forget all the little things that add up – the Chinese food, the dry cleaning and the beer,” Goodman said.

But tallying up expenses doesn’t amount to much unless consumers actually cut back, Goodman said. Fortunately, the pros have advice to offer there, as well.

One suggestion, from author Elaine St. James: Before making a purchase, put it on a 30-day waiting list.

“Odds are, before the 30 days are up, you won’t want it anymore,” said St. James, who gave up a career as a real estate investor to write self-help books starting with the 1994 publication of “Simplify Your Life.”

“Another thing that you could do that is very empowering is set yourself the challenge of not buying anything other than food and the absolute necessities for 30 days,” St. James said.

And be strict about what qualifies as an essential item, she said.

“If the stereo breaks in your car, that is not an absolute necessity. But if your tire blows out, you have to get that fixed,” she said.

St. James also recommended shopping alone, because you’re likely to spend less. And she warned against shopping without a list, because “it is so easy to just see something and buy it on impulse.”

“The idea here is to limit your exposure to things you might be tempted by,” she said.