Savers Remorse

Saver’s remorse is the feeling that sets in when your mind lingers over something that you could have bought and turns it into something that you should have bought. Roughly the opposite of buyer’s remorse, this condition flares up for plenty of cautious consumers during tough economic times, when the value of their savings tumbles.

Any decision to purchase or not to purchase something involves a tradeoff. If you purchase the item, you forfeit the monetary cost. If you skip the purchase, you could be missing out on something that would bring you gratification; you save the tangible price of the item, but only by sacrificing the intangible benefits that it may have brought you.

Why is the pang of saver’s remorse felt so sharply when the economy is tight? Because basically, in an economic recession, consumers are encouraged to spend in the short term to keep the economy from grinding to a halt. This means that interest rates drop, so that keeping your money invested in the stock market or in a savings account doesn’t look as attractive as the falling prices in the current marketplace. Not only are savings worth less, but many sources of revenue fall through too. Jobs are downsized, the costs of benefits go up, and some companies instigate pay-cuts.

So with streams of revenue drying up, average personal income down, and the value of savings considerably less than before, people who postponed certain purchases find that they have less money to make the purchase now, and the amount that they saved by delaying the purchase isn’t worth nearly as much as it was at the time.

However, savers, take heart. A slow economy isn’t all doom and gloom, and in fact it can be an ideal time to step into the shoes of a spender, within reason. After all, prices are falling as businesses attempt to stay afloat by coaxing customers into spending and choosing them over the competition. And for major purchases such as cars and houses, you can lock in extremely low interest rates on your loan. That means that when the economy picks back up, you still get to benefit from those low monthly payments.

Saver’s remorse is similar to buyer’s remorse in some ways, but it’s often easier to alleviate. Just because you passed up one opportunity to make a purchase, it doesn’t mean that there aren’t other great opportunities out there. And being a saver will benefit you more often than not, most especially during tough economic times.