Will the Great Recession produce a renaissance of thrift?
Could the recession prompt a Renaissance of thrift in America?
"A lot of Americans are realizing that with the Great Recession they need to get their houses in order, so that's definitely a positive sign," Stokes said. "However, it's not surprising that when things get tough, people kind of batten down the hatches. The key will be, when things improve, are we going to see a return to those debt habits? What I'd like to see is the rebuilding of thrifty institutions, especially for the middle class and Americans of modest means. I don't know that we're necessarily seeing that."
When asked what kinds of institutions he's referring to, Stokes ticks off a list: schools, houses of worship, banks and credit unions. "Across a number of different kinds of institutions, there are opportunities to encourage thrifty habits such as sharing, saving and having an entrepreneurial mind-set so that when work's not there you know how to create work for yourself."
Wrestling a bear
If the idea of thrift sounds basic, it is. But for many Americans, if not most, practicing it is like wrestling a bear.
According to a survey by CreditDonkey, a credit card comparison website, four out of 10 Americans have less than $500 in readily accessible savings. Six out of 10 are not saving for retirement.
What is needed, according to Stokes, is a fundamental push back against a culture of consumer debt that has come to dominate American society. "I know some people disagree with that," he said. "They say we need the consumer culture to drive the economy. But that's debatable. That's definitely not my opinion. I think you can have both a strong economy and households that are thrifty."
Stokes says that parents have a major role to play in tilting the tide toward thrift. For the past 30 years, advertisers have been selling the consumer culture to children, persuading them to identify themselves as consumers.
"I think the most important thing for parents to do is to model thrifty behaviors," Stokes said. "Reuse, recycle. Show kids that, hey, we have credit cards but we pay them off each month."
Cheryl Carson of Pleasant Grove is the author of the book "Enough is Enough: Making the Decision to Live Debt Free." She also speaks to groups about the dangers of debt. Despite her efforts, however, she's skeptical that thrift is making a comeback.
"People have a hard time with the message of thrift," Carson, 61, says. "They don't want to change their lifestyle. Advertising tells them that they work hard and deserve nice things. However, debt is not just a financial issue. It can contribute to depression and is a major factor in 89 percent of divorces."
Carson's parents grew up during the Great Depression. Her mother was the 13th of 15 children in a family where thrift was the only option. Her father abhorred debt and kept a tiny bankbook to help Carson and her siblings track their 5-cent deposits. She once went to the store with him and asked if she could get a little tin mailbox that had caught her eye. To her surprise, he said yes. However, upon returning home he subtracted the amount of the mailbox from her account in the bankbook. That simple experience taught Carson a long-lasting lesson that nothing is free.
Twenty years ago, after her husband incurred a $61,000 debt following a business setback, Carson told her children that the family would have to go into survival mode. Her son later told her that he knew they were poor when "they went into survival mode and nothing changed." Despite her husband's modest income, the couple paid off the business debt in three years and then set about paying off their mortgage, which was also about $60,000. Carson made a paper chain with each link representing a mortgage payment. The children were too young to understand amortization schedules, but they saw the chain getting shorter each month. Three years later, it was gone.
Today, Carson and her husband maintain a $5,000 rainy-day fund and are close to paying off two rental properties, which they plan to use to fund their retirement.
Thrift: a big idea
"Be frugal and free," Benjamin Franklin wrote in "The Way to Wealth." He was writing about freedom from the chains of debt, but the saying also applies to the relationship between thrift and generosity.
"(It's the notion of) helping yourself so you're in position to help another," Gibbs said.
Stokes agrees. "Thrift has always included some element of stewardship and generosity. … The idea that what we have is not ours but something that we're holding in trust not only for ourselves, but for future generations.
"What I share with someone else today who's in need might come back to help me or future generations. There's a connectedness there that you don't see with a flatter idea of financial literacy. The thrift idea is a big idea," Stokes said.
- Lehi-based Vivint debuts innovation facility
- Dave Ramsey says: Keep expectations clear...
- UTA seeks to hire bus drivers, other workers
- Fire exposes illegal Chinese factories in Italy
- Lower gas prices could mean economic impact...
- Support for statewide nondiscrimination law...
- Egg freezing is now a perk of the workplace....
- Customer decline hits McDonald's sales, profit
- Housing recovery slowest since World... 12
- Support for statewide nondiscrimination... 7
- Customer decline hits McDonald's sales,... 3
- Another year, another small Social... 2
- Lower gas prices could mean economic... 2
- Egg freezing is now a perk of the... 2
- Federal Reserve Chair Janet Yellen says... 1
- Utah jobless rate stays steady at 3.5... 1