Last night I played cards at my Wednesday night poker match. There are seven of us and we always seem to have a good time. Sadly, I am usually a modest looser and last night was no different. Lost $8. A couple of my friends take it pretty seriously and I suppose I should too. After All, eight bucks is a significant percentage loss from my $20 buy-in.
Between deals I heard about neighbor’s financial plights. At least three acquaintances are selling their golf club memberships. One supposedly lost $5 million in the Madoff mess. He is also now trying to sell his house. Another friend lost $700,000 in a hedge fund and they are considering moving back north. Everyone seems to be cutting back. No one is immune from this mess.
- We have downgraded our golf club membership to social or house. We won’t have use of the pool when grand kids come down but we have a pretty big ocean five minutes away with one of the country’s most beautiful beaches.
- We go to Costco less and less. It seems a trip to Costco for chicken always builds into a couple of hundred dollars. On the way to the register I will pick up $10 cashews, a $6 case of clementines, five or six bottles of wine for $11 each , a $16 hard cover best seller for Pam, $9 frozen shrimps, $8 for four pounds of butter….it goes on and on. When I get home I put all the perishables into the extra refrigerator we had to buy to store all this crap. No more! Pulled the plug on the ice box.
- I now buy my gas at Hess. They have a no-fee credit card that gives me 10% off gas for the first ninety days and 5% thereafter. Exxon has a similar card.
- We take better care of our two cars. They have to last. When its warm I wash them myself. I even enjoy it.
- We dropped out of the wine club. I had become almost notorious for sipping too many samples at their tastings and ordering a case of everything. I loved it when the wine was delivered and then stacking the bottles in my library. The $500-$600 bills would come in a month later and I would swear off wine for a week. Or a day. I now buy large jugs of junk wines at the grocery store.
- Starbucks is right up the street but I haven’t been in there for two years. McDonald’s new coffee recipe is terrific and I overcame my shyness about asking for a “senior coffee”. Painful at first, I now boast about paying forty-nine cents for the best coffee in town.
- My wife won’t go to Wal-Mart with me. But I have been going there for a couple of years to shop for groceries. I have a sister who berates me for letting this company profit from child labor, etc. She has a point, of course, but how do I simply avoid the savings they offer? Over the last year I see more and more people who look and dress like me shopping there. I don’t have to speak Spanish to the Wal-Mart help anymore. Most of the employees are folks like me. And since the Mexican reverse migration began I notice a reduction in Mexican food offerings. Something I miss.
So, everyone is cutting back. Everyone. And the result is lower consumer spending, a higher savings rate and a lower stock market. We will still get bear market rallies in stocks but I don’t see the trend changing for a while. What are you doing to cut back expenses?
