Spend Cautiously While Recession Lasts
Saturday, July 11, 2009, 7:37 AM | 1 Comment
Most financial gurus agree that cash is king during any recession. Spend wisely now and you will save a bundle over what things will cost once the fog of the recession lifts. I say fog because our eyesight sometimes become so weak we can’t think let alone see things clearly during a recession. However, don’t go overboard. Buy what you need. This may be the best in months to come.
Apparel
There is a glut of stylish, high-quality cashmere sweaters, scarves and blankets on store shelves, being offered at historically low prices as retailers scramble to lighten their inventory. Some reports indicate that the prices on dressy tuxedos and gowns have been slashed about 75%. I, personally, never bought cashmere sweaters because my lifestyle is quite different.
Computer memory
With oversupply even before the recession and demand plunging during the recession, memory prices have gone into virtual free fall. Rather than buying a new computer, though, you can invest in more memory to get similar results.
To upgrade to two gigabytes may cost as little as $30 – down from $100 two years ago – and could double your computer’s speed. Get up to four gigabytes for $50 – down from $200 two years ago. Some experts predict these prices will double or even triple in short order when the economy recovers.
Last night, my daughter bought a Gateway laptop with 4GB memory and 320GB disk for $470. She is a medical student overseas. She says she needs more space for images and pictures.
Cameras
At many retailers, it’s now possible to buy a point-and-shoot digital camera for under $100. I have an old camera that is probably 15 years old. It works great so I would wait for another recession. Hopefully, that will not come in my remaining years of life.
- Amazon.com was recently selling a General Electric 10-megapixel digital camera for $180, down 46% from its list price.
- Pricegrabber.com was recently selling a Panasonic VDR-D50 DVD Camcorder for $185, down 38% from its list price.
- Camera maker Pentax recently dropped the price of its K20D digital SLR by $200.
New cars
The global auto industry is on its back. It is on pace to sell just 9 million vehicles this year, down from more than 15 million a few years ago. My family bought a Toyota sedan two years ago, so I will stay put. Something at a discount does not mean I should buy it. But if you were thinking about buying a car, then this year may be the best time.
- Zero-percent financing is once again commonly available at GM, Ford, Chrysler, Volkswagen, Toyota, Nissan and Mazda.
- Even BMW has an attractive 0.9% rate on certain vehicles.
- On top of that, the government has made sales and excise taxes on a new vehicle bought this year tax deductible without itemizing.
- The government is also standing behind warranties on GM and Chrysler vehicles, should those troubled car companies be unable to live up to their promises.
- In addition, motorists could get up to $4,500 to trade in gas guzzlers.
Prices could start to firm by the end of year as weak dealers go out of business and car-makers cut back production.
Housing
We all know when we buy home, we are in it for the long haul. Prices have fallen by 50% or more in parts of Florida, Nevada and Arizona. That’s a stunning discount which when coupled with low mortgage rates makes housing today more affordable than it has been in many years.
You can now buy the median house with 37% less income than you needed two years ago. Meanwhile, the government is offering up to $8,000 in tax credits this year for first-time buyers which can help in down payment.
In a Nutshell
Such steep discounts, especially on new technology, are rare and as the economy recovers you can expect the above items to float back toward the list price.
Always do your research before you embark on some expensive shopping spree no matter how much money you have.
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