Retro music, films and fashions are one thing. Retro behavior, like paying debts and saving money, is something else.
But Americans seem to be rediscovering the financial practices of their grandparents these days: paying down debt, saving money (even at miserably low interest rates), taking the Just Say No approach to credit card sprees.
In November, Fidelity Investments conducted its annual poll designed to collect information about people’s financial priorities. Nearly half the 1,000 or so adults responding said that saving money was their first priority, and they wanted to get more into their savings accounts (a median of $2,400) than the target savings figure given last year (a median of $1,200).
Twenty-one percent said they planned to spend less, and 19 percent—more than double the figure of 8 percent from last year—said they were determined to pay down debt. A third of respondents said they are less in debt now than they were a year ago.
Those claims are at least partially borne out by information from the Federal Reserve. According to the Fed, credit card debt in the U.S. has fallen by $183.5 billion since August, 2008—from $973.6 billion to $790.1 billion, an 18.8 percent drop. During that period, the 54 million families with credit card debt reduced their card balances by an average of $3,398.
And in 2010, according to the Fed, Americans put $600 billion into certificates of deposit—an eye-opening figure considering that between 2004 and 2008, an average of only $250 billion went into CDs each year.
Moreover, according to Time, “There has also been an across-the-board rise in DIYers, with increases in the percentage of people who say they handle home maintenance, yard work, housecleaning, auto repairs, and even haircutting themselves, rather than paying someone else to do the work.
“(Side note: Consumers have also been spending more on auto repairs in order to keep older vehicles on the road longer, rather than dropping more money to buy new cars.)”
In other reports, cobblers and tailors have said their businesses are growing as people hang on to no longer new shoes and clothing. The spikes in those businesses are hardly enough to lift the general economy, but they’re a sign of change. Time’s findings were summed up in the title of its article: “The Frugal ‘New Normal’ Has Become the Norm.””