Living on a budget has Americans feeling all tuckered out. Image: CC JoyTek/Flickr
Middle class Americans are suffering from “frugal fatigue” as they wait for the end of the recession to trickle down to them. Frugal fatigue is a weariness with tight budgets, pinching pennies and settling for less. But as living within one’s means becomes the new normal, frugal fatigue may describe a failure to accept financial responsibility.
The frugal fatigue epidemic
Frugal fatigue has set in upon a generation of Americans not accustomed to creating a budget, tracking spending and saving for an emergency fund. Two thirds of Americans are suffering from this debilitating disorder, according to the National Foundation for Credit Counseling. In a recent NFCC survey, 66 percent of respondents said yes, they had frugal fatigue, and they’re tired of pinching pennies, but they have no choice but to continue for the foreseeable future. Twenty percent in the survey said they were better off living with a new sense of financial responsibility and are happy to continue. Eight percent claimed their financial habits were unaffected by the recession and 5 percent were ready to return to their spendthrift ways.
Giving in to frugal fatigue
The rate of economic growth, however slow, is encouraging some people who have jobs to set aside their frugality and splurge. After two years of decline, credit card debt is rising, car loans are boosting U.S. automakers, and investors are leveraging their debt. According to the Federal Reserve, revolving credit card debt increased 2.5 percent from $807.2 billion to $826.6 billion in December. Non-revolving debt such as installment loans rose from $1.608 trillion in November to $1.611 trillion in December. Investors have been watching and have acted accordingly. On the New York Stock Exchange, the margin of credit, which is money investors borrow to buy stock, increased to $276 billion in December, up from $233 billion in January 2010.
Frugal fatigue is all in your head
For consumers suffering from frugal fatigue, it’s important to remember that it is a state of mind, not a psychological disorder. Those who who miss spending beyond what their income can support have missed the point made by the recession. Is it better to feel stressed by a pile of debt, or feel at ease for being relieved of that burden? Many people who lose weight just end up putting the pounds back on again. Others stay fit for the rest of their life.
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