10 Ways to Thrive After the Recession

Get a better bank, take advantage of new government programs, and don't overdo frugality.

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Americans have put themselves on a budget. They're spurning Caribbean vacations, $10 cocktails, and designer coffees in favor of shoveling more money into savings accounts. In the first quarter of 2009, the personal savings rate hit 4.2 percent, its highest level since 1998. At the same time, consumer credit card debt fell by 6.5 percent. And in a recent survey by the National Foundation for Credit Counseling, 57 percent of Americans said that they're spending less than they were a year ago.

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That moderation, it turns out, could outlast the recession, and most economists and consumer experts say that's a good thing. In the NFCC survey, about half of the respondents who had reduced their spending said that they would continue to spend less even if their financial situation improved. "The consumer has fundamentally changed," says Margot Bogue, associate director of brand planning for the advertising firm Cramer-Krasselt. The new "evolved consumer," she says, shops with more discipline and focuses on buying products with lasting value rather than just accumulating stuff.

To take advantage of that shift and thrive in the new, post-recession economy, consider making these 10 changes:

Rethink your lifestyle. Veronica Neilan, a 25-year-old Brooklynite who recently completed a master's degree in forensic mental health counseling, is considering moving back to her mother's house in New Hampshire while she looks for a job. She will soon need to start paying back the $113,000 in student loans that she has accumulated over the past seven years. She's learned to ask for things such as pasta or gift certificates from relatives who are giving her presents, a move that keeps her food costs down. She rarely buys new clothes unless they are on sale or she can use a gift certificate, and when she needed a new television, she found one being given away free online. Neilan says she expects her frugal behavior to stick. "I don't want to be the person who buys a house they can't afford," she says.

Robbie Blinkoff, principal anthropologist at Context-Based Research Group, a consulting firm that recently conducted interviews with consumers, says lifestyle overhauls like Neilan's are easier for younger consumers to adopt. "They're just learning habits about how to consume. It will last into the recovery," he says, just as the Great Depression turned many people who are now in their 80s and 90s into lifelong savers.

Eliminate small expenses that add up. After Deborah Pont, 41, of Stonington, Conn., was laid off from her communications job at a large financial services firm in January, she dramatically reduced her budget: She stopped going out to dinner, shopping, visiting expensive hair salons, and getting her nails done. She also rediscovered grocery store coupons and started buying what's on sale. It was easy, in part because so many of her friends were making similar cutbacks. "Everybody else said, 'Let's not go out, let's not spend too much money,' so somebody would make dinner and we'd go to their house," Pont says.

What she discovered is that it's a relief not to feel pressure to spend so much. She has more time for things she enjoys, such as gardening and home improvement projects, and says that she probably won't return to regular spa visits even after finding a new job.

Blinkoff says Pont's discovery is not uncommon. "People have kind of woken up, and they feel the things they consumed don't match who they are and their identity," he says.

Downsizepermanently. Doreen Orion, 49, a psychiatrist and author of the memoir Queen of the Road, also decided to turn a temporary exercise in minimalism into a longer-term lifestyle. She initially cringed at the thought of leaving her dream house in Boulder, Colo., and her 200 pairs of shoes to go on a road trip with her husband. But at his insistence, they spent a year living in a 340-square-foot bus, camping throughout the country.

When the couple returned home to their luxe but hardworking lifestyle, they realized they were much happier with less. They calculated that, even though their 401(k)'s had fallen in value, if they sold their home and lived in their bus while working occasionally, they could support themselves. Such a dramatic change, she says, "put a spark back into our lives. . . . We discovered there can be an upside to downsizing."