The Pain of Not Spending

I was listening to Planet Money on NPR (I recently subscribed to this podcast that updates me on the economy everyday and explains it in a way I understand). The episode was called “The Pain of Not Spending.” They talked about the recession and said spending was down 1.2% in September. It doesn’t sound like a lot, but apparently it is. They said that’s enough for you to notice a drop in inventory and a drop in prices.

A drop in prices sounded great until they talked about the pitfalls of deflation. Spending is an important indicator of a recession and they said in September the American consumer was our last hope for the economy, but people stopped buying things. I haven't felt the pain yet.

So here they are telling me that the consumer is hurting the economy by not spending money. Yet, we’re told not to live beyond our means (even the guy explaining this said he’s cut his living costs). Getting loans that we can’t afford to pay back is a big part of what’s wrong with the economy, right? It’s a big part of all the foreclosures and the banks not wanting to lend to each other, right? So is it people with money that aren’t spending it? Is that the problem?

For a few days now, I’ve been thinking about how much money I spend. I mean, I’m always thinking about what I spend, but lately I’ve realized I’ve been spending a lot more than I usually spend.

I bought 4 items at Costco the other day and spent $60. And I spent $40 at the grocery store the day before – that’s $100 on groceries in two days. I remember in college I got by on $50 a month. I ate a lot of soup and peanut butter sandwiches, but I got by.

I eat out a lot more and I cook more elaborate meals. I also have more money than I used to. But still, I think saving money is fun, so despite what economists are telling me to do, I’m going to stop spending money – for a little while.

I decided to see how long I could go without handing over cash or my credit card. I have a freezer full of food, I have a tank full of gas and I think I’m going to try it. I’m giving myself through Thursday (I have a hair appointment on Friday). So if I count yesterday (and I’m going to) that should be 5 days of not spending. I’ll report back and let you know how painful it was.

Now, don’t get all literal on me and tell me I need to turn off the water and gas and everything – utilities are excluded from this exercise. I went to the dentist for a crown today, but I don’t plan on paying him for awhile.

And if you think it would be funny to tempt me by inviting me to lunch, you’re right. That’s funny. It’s also mean. But I’ll still say yes; I’ll just eat before I go or pick off your plate. Or I have a coupon for a free lunch at La Sage Bistro, we can go there. Or you can buy my meal and I’ll get yours next time.

I’m trying to think of the random expenses that could come up…this should be interesting.