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Luxuries, necessities and the economic slump

   Over the last few days, I have had a least a dozen conversations with people about what they are cutting back on during this economic slump. I have a friend that cut out her vacation to Florida this winter. I have another who gave up her Saturday night babysitter and her cleaning service.  I spoke to a boss who cut back on dry cleaning and business owner who let go of his assistant. 

    By now, most people have changed their definition of necessities and  luxuries. Personally, I have cut back on the conveniences that helped with work/life balance --no more fast food or babysitters. But then there's a friend of mine, a single mom, who recently lost her job. As she blows through her savings, she's cutting back on things I consider necessities -- her house phone, her health insurance.

     Here's something else to think about: More than one in four working families -- a total of 42 million adults and children -- are low-income, earning too little to meet their basic needs. "Still Working Hard, Still Falling Short," a follow-up to the 2004 report "Working Hard, Falling Short," found that an additional 350,000 working families were low-income in 2006 compared to 2002.  Imagine what those families are giving up during this slump!

    Even as people find themselves out of work and faced with career choices, life coach Drazia Rubenstein said some of her clients now consider going to a life coach a luxury.

     I found an interesting study by Pew Research about consumer products we now consider necessities. The list has grown in the past decade. I have to wonder if the list of services has grown too.  Can you live without a tech helpline? Would you survive without a mechanic? Could you show up at your office if you gave up dry cleaning?   

     Are you rethinking what you consider a necessity? Has the volatility of the financial markets scared you enough to cut drastically or are you still making minor cutbacks in your lifestyle and budget?