The Recession Will End … When Cheap Treats are History and Spending is Back to Normal

[Consumer spending] makes up about 70% of the economy, and the American shopper traditionally has led the nation out of recession. Not this time, most experts say. Consumers have lost about $13 trillion in wealth in the housing and stock market swoons. They’re trying to recoup some of that by socking away any extra cash. The savings rate hit 5.2% in the second quarter vs. a low of 1% before the crisis. And don’t forget tight-fisted lenders, the fall-off in home equity loans amid plunging real estate values, and a high jobless rate that makes even working Americans nervous about their future.

“People are beginning to realize you can’t live beyond your means forever,” says Standard & Poor’s chief economist David Wyss.” (via USA Today)

Why it might be false and consumer spending won’t get us out of the recession: After the Great Depression, many Americans stayed cheap and thrifty long after the economy started to grow—long enough for their children and grandchildren to remember. The Great Recession has been the first major economic disruption in many Americans’ lifetimes, so of course there are questions about whether the effects will be similarly lasting. There is no robust recovery clearly in sight…

Eating for Free

Restaurant owners certainly aren’t having a good year. From widespread job loss to lingering worries about the country’s economic future, record numbers of families have begun cooking at home rather than spending money eating out—leading to a 14 percent drop in business at fine-dining restaurants so far in 2009.

For customers still going out on a regular basis, however, the dining scene has never looked better.

That’s because many restaurants are finding that coupons and discounted specials just aren’t enough anymore. Instead, they’re being forced to go the extra mile and get creative—letting kids eat free, giving away discounted tickets to movies, and even throwing in complimentary cocktails and wine…

Swap Parties for Small People

Even a bad economy can’t stop parent peer pressure—those overpriced strollers and designer baby sneakers are a persistent part of the dynamic. But for some frugal parents these pint size luxuries don’t cost quite that much, or anything at all.

Even while retailers like Carter’s and Gap are posting solid sales in baby apparel, an increasing number of parents say they’re cutting costs on high-end purchases like strollers and cribs by shopping secondhand. An even cheaper—and more fun—option is the growing number of swap parties for people with kids.

The clothing swap concept has been written about a ton, and is fairly simple. Groups of friends come together to trade duds they no longer wear. The kids’ version is pretty much the same, with parents exchanging strollers, clothes and toys they don’t need.

Hosting a swap can be tricky if you don’t know what to expect, which is why we’ve put together a handy guide for throwing your first kids’ swap party…

Recessionary Travel Devices

Ah, summer. A time of travel, fun — and trying to cut down on staycations. If you’re getting away this summer, or even thinking about it, The Simple Dollar has these rules for keeping costs down. The list was written for businesses, but it seems useful for anyone heading out on the road:

Plan around public transportation. Before you leave, figure out how to get to your hotel using public transportation in the city, print out the route, and keep it with you. Do the reverse for the return trip as well.

Make lodging reservations directly with the branch you’re staying at. Use web sites to identify places to stay, but before reserving a room, call the hotel directly before using the online reservation system and don’t hesitate to ask for a reduced rate while on the phone. You’re likely to get a much better rate, particularly if it’s out of season, during the week, or you’re staying for a longer period.

Don’t spend a dime in the airport. Throw a few granola bars and an empty bottle into your carry-on bag…

Mad Libs for Saving Money

Our friends at Wisebread, the funnest frugal living site we know, posted this little contest earlier this week to find out what kinds of spending trade-offs the recession had inspired. (On Recessionwire, we call these dilemmas “Recession Concessions.”)

Wisebread asked readers to fill in the blanks: “I used to _____, but now I ____ to save money.” A handful of the 144 responses are below. Read them all here.

“I used to leave my electronics running on power supply, now I charge them in the office and run them on batteries to save money.”

“I used to spend money on gas getting to and from work. But now that my company has gone belly up and I’m unemployed, I’m staying at home and saving all that gas money!”

“I used to have no idea where my money went every month but now I write down *every* expense.”…