Personal Finance: Recession producing more penny pinchers
People often reduce their spending after their pay is cut or they lose their jobs. But a new Pew Research Center survey shows that the new frugality many people are embracing could have long-term impact on the consumerism that fuels the American economy.
Americans' penny pinching may outlast the recession and its immediate aftermath, the survey indicated. Nearly half of respondents say they plan to save more; nearly a third say they plan to spend less and 30 percent say they plan to borrow less, reports Michael A. Fletcher.
It's no wonder frugality is taking hold. The recession has directly hit more than half of the nation's working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, Fletcher writes. It's quite sobering to read the Pew study How the Great Recession Has Changed Life in America. Take time to read it.
"Whether by choice or necessity, many Americans have already significantly scaled back their pre-recession borrow-and-spend habits," Pew researchers write.
Has the recession made it a necessity for you to become a great penny pincher? Tell me about it for this week's Color of Money Question. Send your comments to firstname.lastname@example.org and put 'New Frugality" in the subject line.
Harder Times for Graying Workers
Recent statistics show that the nationwide unemployment rate for older workers has barely moved since hitting a record high of 7.2 percent in December, reports Chris Isidore in Job blues for gray-haired workers.
There are a few trends coming out of employment trouble for older workers. Some are taking Social Security benefits early. Others are withdrawing funds from their retirement accounts resulting in tax penalties.
Tim Driver, chief executive of RetirementJobs.com, hopes to see a reversal in the trends as more employers see the benefit in hiring older workers. In the CNN/Money report, Driver said: "Beside the opportunity to get the experience and lifetime of skills that older workers bring with them, they are actually more likely to stay put for longer than younger workers, thus reducing job turnover and the costs associated with hiring and training."
Student Loan Advice
Here are some answers to questions leftover from June's online chat with Reyna Gobel, author of the Color of Money Book Club Selection "Graduation Debt: How to Manage Student Loans and Live Your Life."
Q: Do you have a recommendation about any certain types of loans for the parent of a freshman student?