Tuesday AM September 30th, 2008
by: Ed Mayberry, September 29, 2008 4:09:34 pm
Consumers may have already burned through their savings cushion, trying to get past an economic struggle that hasn't gone away. Recovering from Hurricane Ike hasn't helped. Money Management International's Tanisha Warner says a lot of consumers were hoping the downturn in the economy was temporary.
"So, really it's just a matter of tighten up your budget for good and so that you can free up some extra cash to be able to take care of some of these current expenses that you have today." Ed: "I guess there are signs that people are doing that because restaraunts have slower business." "Sure. There was a recent survey that we've put together that basically shows that basically shows that 40 per cent of people have adjusted their spending just because of higher gas prices and food prices. Things like restaurants and entertainment are the first things to go."
Warner says include restaurants and entertainment in your budget.
"A lot of time people try to 'cold turkey' it, and that's the reason why I say, you know, tweaking certain things short-term is not necessarily the best strategy. You should probably look long-term and just kind of, you know, make some changes that needed to happen anyway, that you'll keep doing, even in the long-term. Be smart consumers, and you know, if you can get everything in one area, then it's best to do that, than to travel everywhere, because you know the reality is the gas prices are not going to go down to where they used to be, so you have to start making some adjustments to accomodate that change."
Warner says the temptation is to turn to credit cards to get over temporary hardships. But temporary economic problems are turning out to be more long-term.
Ed Mayberry, KUHF Houston Public Radio News.