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| Shopping: New York City resident Tanya Acevedo walks with her daughter, Angelina, after a trip to a supermarket. Ms. Acevedo
compares prices between two grocery stores near her home. Ann Hermes/The Christian Science Monitor |
Americans tightening belts
More consumers are trimming spending and debt because their net worth has fallen fast.
from the October 10, 2008 edition
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Reporter Ron Scherer describes the ways in which Americans are cutting back on spending, including less use of their credit cards.
"You've got all kinds of economic reasons," says Mr. Sternal, including gasoline prices, job loss, and people finally getting caught up with their credit and debt situations.
Aside from autos, another big-ticket item seeing a downturn is boats. The National Marine Manufacturers Association (NMMA) estimates that sales of powerboats were down 23 percent this August compared with a year before.
"Boating sales track closely to consumer-confidence cycles," says Kelly Kaylor, a spokeswoman for NMMA in Chicago. "When people are feeling confident, there are more boat purchases."
Sales have been declining for the past two years, according to the Bellwether Report, issued by Info-Link Technologies Inc. in Miami. The company tracks sales by analyzing applications for fishing licenses and state sales-tax payments, among other things.
"Boat loans are harder to get, and fuel prices have had a big impact as well," says Jesse Wells, director of sales and marketing. "Some 80 percent of all boats sold are 18 feet or less, and that's an easy purchase to put off."
For other Americans, the tough job market is causing them to rein in spending. Last week, the government reported there were some 159,000 fewer people employed.
Raul Vargas of Orlando, Fla., can relate. In July, he lost his job as a nuclear pharmacy technician. He's getting by on temp work, helping a bookstore move. "Entertainment is out," Mr. Vargas says. "Going out to eat, I've had to cut back."
Big monthly rents
Even in New York City, where residents often have to pay huge monthly rents, some belt-tightening appears to be happening.
Greg Wilpert has been trying to find a cheaper apartment since last May, but he has yet to find someone to sublease his Park Avenue apartment. A couple of prospective renters trickled in each week over the summer, but since September, no one has even come to look at it.
"We thought the apartment was a good deal, [but] rents have been going down. It's probably not such a good deal anymore," says Mr. Wilpert, who's looking to spend 30 to 40 percent less than he's currently paying.
For some Americans, just hearing about the financial crisis is causing them to worry about money. One such person is Michele Trejo, whose husband is currently deployed to the Persian Gulf.
"It makes me worry about myself and my family," said Ms. Trejo as she waited to attend a math class at San Diego's Mesa College, where she's been working toward a degree in criminology. "How are we going to live? We already live paycheck to paycheck. Who can afford to pay all the bills?"
Trejo says her aunt lost her house in Las Vegas to foreclosure, and now Trejo wonders if the housing-market mess will ruin her own plans to buy a home with her husband. "It's scary about people losing their homes," she says. "I don't want to be in that situation."
There are even some Americans, often the frugal ones, who view the current situation as a good lesson for America. "The government and people in general have been going way over their heads," says Ann Mays, an Orlando hairdresser. "It can be very healthy for kids to learn how to live frugally. Walking more. Spending more time with the kids. Those are positive things."
• Amy Green in Orlando, Fla.; Randy Dotinga in San Diego; and Simone Baribeau in New York contributed to this story.1 | Page 2
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