Earlier this week, Lindsey and I were discussing buying clothes secondhand, and I joked that I wasn’t spending money on much of anything, let alone on Poshmark, where it feels like a lot of people try to resell their old clothes for unreasonably high prices. There are a lot of reasons for my financial pullback, and they all revolve around what feels like an increasingly shaky economy.
Of course, a recent job loss makes it a lot easier for me to drastically cut my spending; I can’t really afford to buy much anyway. But I moved and got married earlier this year, so I was already planning to rein things in and double down on saving. Those two big life changes kind of left me burnt out when it came to spending money.
What’s been notable over the past few months, at least to me, is that as someone who had no problem with buying little treats whenever I felt like it over the past decade, the consumer side of my brain has switched off without much effort. The only times I miss spending are when my friends are doing something, or I walk by a restaurant I might want to try. Cutting back on clothing, home goods, and other knickknacks has not been difficult. Seeing how out of control prices have gotten for pretty much everything has made things easier still. And whatever’s going on with tariffs is also spooking me—I don’t want to be surprised by an unexpectedly massive UPS bill.(General caveat that I recognize the privilege I have to not need to spend much to get by.)
I’m far from the only one cutting back. Though consumer spending ticked up last quarter, it’s largely happening among only a sliver of the population: The top 10% of earners account for almost 50% of consumer spending, according to Moody’s Analytics. Meanwhile, the bottom 60% of earners account for less than 20% of consumption. As Bloomberg opinion columnist Nir Kaissar put it, millions of Americans are becoming economically invisible.
That so few consumers are driving our consumer-driven economy makes me nervous. While no one knows when a recession will hit, there’s no denying the economy, broadly, has felt more unstable lately. If the spending of an ever-smaller portion of the population is what’s keeping us afloat, that seems like a bad omen.
The best defense against a downturn—or at least a job loss—is a sizable savings account. I’m still rebuilding my income after my layoff, but my husband and I have been discussing ways to focus on our joint savings for at least the next year, and what that will entail. The irony, of course, is that if everyone pulls back their spending, a recession will definitely occur.
Years ago, I wrote a story for Lifehacker (alas I cannot find it now) about how investing in hobbies can actually help you save money in the long run, assuming you’re not constantly shelling out for new related gadgets. I’ve been thinking about that story a lot lately, and how it’s important to spend my time doing things that don’t cost much: reading, running, doing yoga, and cooking and baking (although rising food costs are a pain). In a time when the economy feels so fragile, finding comfort in low-cost activities that don’t require constant consumption feels like one of the only things within my control.
What low- or no-cost activities have you been enjoying lately? Let us know in the comments
-Alicia
Consumer sentiment in the news
- To be clear, American consumers are still spending—at least, the wealthy ones are.
- Alicia’s been writing about the K-shaped economy, and this BBC story gets at an important part of it: Poorer Americans are hit hardest as tariffs fuel price increases.
- It really is a tale of two economies. While high-income households have been driving spending, low-income households have been racking up credit card debt.
- And as Mark Zandi at Moody’s reports, not only do wealthier households in the U.S. account for the bulk of consumer spending, but they also account for the bulk of the personal savings. “Just another reason why most Americans feel uncomfortable about their financial futures.”
- There could be a crossover into the holiday season. “Many shoppers are approaching the holidays with caution and practicality, adjusting their budgets and habits accordingly,” McKinsey reports. That said, what consumers plan to do and what they actually do often differ greatly.
What we’re talking about:
- I unabashedly love etiquette guides, and GQ’s “125 Rules for Modern Gentlemen” does not disappoint. But if you’re a married dad of school-aged kids who is able to accomplish number 60, you need to reconsider your priorities. 👀 -Lindsey
- I’ve been wondering about Tuckernuck, the WASPy clothing marketplace turned elevated East Coast preppy brand, which is constantly advertised to me on Instagram. (I admittedly click on some of the dresses, though I haven’t purchased anything.) I read this story on the new NYC location from The Cut with interest. I’m not really sure what to make of it, but I do think fashion writers could ease up on the superiority when writing about brands that appeal to professional women. -Alicia (Lindsey here to say I recently went to the UES store, and I wasn’t really impressed!)
- The news around Tylenol and pregnancy has been absolutely maddening, and I’ll admit I shed some angry tears while listening to an NPR story about RFK’s press conference. (Love when a bunch of old men stand around lecturing women about their bodies!) I had a lot of anxiety when I was pregnant, and I’m so grateful I had great doctors who cared for me. But I also really appreciated the work of Emily Oster, who presents such thoughtful, science-backed research to help pregnant women become educated on the best choices for their needs. Big hugs to all the pregnant women out there. It’s not easy! I’m rooting for you! -Lindsey
- I really didn’t think I was going to like Slow Horses (jokes about various bodily functions are not my thing), but it’s so much better than I expected. Excited to jump into the new season! -Alicia
On our radar
- Thanks so much to everyone who joined the estate planning webinar with Steward yesterday. If you have any feedback, let us know! ICYMI, you can watch the recording here! (And don’t forget you can take advantage of a $500 “friends of The Purse” discount through October 31.) #partner
- Speaking of webinars, friend of The Purse Heather Boneparth and her husband, Doug, are teaming up with Ellevest for a virtual lunch-and-learn all about the cost of caring for loved ones. It’s taking place at 12:00 p.m. EST on October 6. You can register here!
- Alicia is preparing for the release of The Life of a Showgirl Thursday night! If you need more TS content, she’ll be writing about her reactions and immediate favorite tracks on Money Moves.
Best money we spent this week
- The only thing I bought this week aside from groceries was the Bonne Maman advent calendar (~$70 including tax and shipping). I was jealous of everyone’s videos opening all of their little jams last year so I decided to buy it this year before it sells out. I’ve never had an advent calendar before so I’m excited, though it definitely is a superfluous expense! -Alicia
- My neck and upper back have been killing me (too much time spent hunched over my laptop), and I finally made myself go to see a physical therapist. Best $20 copay I’ve spent in a while. Now I just need to be consistent about the exercises. -Lindsey
