The economy is in a crisis situation and the costs of everything are rising and falling at record speeds. People are having a great deal of trouble finding the funds to pay for the necessities of life, most especially energy costs. Not very long ago everyone was talking about the price of gasoline on a daily basis. Once gas prices went over $4.00 per gallon, consumers everywhere were trying to find ways to cut back. Many were even canceling planned visits to family and delaying vacations. Car pooling became temporarily very popular although I do believe, even with the current drop in prices, people are still giving a good deal of thought to their travel plans.

The costs of electric have also been skyrocketing and have not shown signs of slowing down recently. The Energy Department has stated that heating oil prices have been greatly reduced since last winter, but are, again, on the rise with a very large increase since February. Homeowners are looking for ways to fight back and many are taking advantage of the opportunity to lock in the price of power for from one to two years. This, of course, is wonderful for budgeting your finances and enables you to calculate in advance what size bill you should be expecting. The problem, however, is what will happen if the cost of electric becomes less and you are locked into a higher price? You cannot simply request the lower price as you have signed a commitment and must honor it.

An example of locking in prices that did not work out well is a heating oil supplier in the New England area who offered to lock-in prices to his customers last summer, when fuel was more than $4.00 per gallon. Many people signed a contract because they were afraid of just how high the price could go. By the middle of last winter, the price was approximately $2.00 per gallon and many expected the dealer to cut his prices to them. The dealer, however, had a similar fixed-price with his wholesaler, and had guaranteed that he would purchase a specific amount of oil at the fixed price. It was not possible for him to accommodate all of the requests he received from his customers for lower prices. Unfortunately, this offer, which was meant to improve the dealer’s relationships with his customers, actually backfired and left many customers feeling cheated, although the dealer did not do anything wrong.

Americans have found numerous ways to cut their expenses during the current recession. We have readjusted our thinking as to what we actually need, and have learned to cut back on many everyday expenses. Our children are also learning to make do with less, and these lessons seem to be very good for everyone. Families are spending more quality time together and children are again learning to play with others in an unstructured way. The real question is, when the economy improves, will we return to our old purchasing patterns, or will we stick with the new ones we are currently using?

Many consumers who have been questioned about this, truly believe that they will continue with the lessons they have recently learned about living with less. The “green” movement also contributes to this new attitude. We are all re-evaluating our excessive lifestyles and realizing that frequently, less is more.

During the Great Depression, 25% to 30% of the workforce was unemployed. It became necessary that people adjusted to living meagerly and, in many cases, this continued throughout the years, as they were always saving their money and being very careful about any purchases they made. They would save for years in order to purchase a car or new appliance for cash. They didn’t want anything to do with credit and believed they should only purchase what they could afford at that time. The only exception was probably a home.

Today’s consumers have been learning new ways to save on an almost daily basis. Coupons have become a way of life and many of us will not shop unless there are good sales being offered. I recently visited the local library and was surprised to see that they have a coupon box at the circulation desk, available for their patrons. This is just one more new little way that people are helping one another to save.

Although consumers may gradually return to restaurants and upgrade some of their purchases, it is thought they will remain more conscious of their spending habits. The area most likely to be hurt will probably be the purchase of luxury items. It may take a long time before we are ready to return to the true luxuries we have had in the past.