The staggering inflation and record-setting gas prices are just two of the economic pains Americans are enduring right now, and many feel powerless to blunt the impact.
Dr. Michael G. Thomas, a professor of Financial Planning, Housing and Consumer Economics at the University of Georgia's College of Family and Consumer Sciences, spoke with AccessWDUN about the economic situation and ways that you can take small steps to weather the storm.
Q: What is the 'root cause' of the economic situation in America right now?
A: We're now paying some of the cost for some of the measures we took to mitigate the costs, or what we thought would mitigate the cost and the effect of COVID-19... because of the lockdown, because of people being afraid to go out into the world some businesses were struggling as a result...but this is a global affair. Now we get on the back end of the pandemic, and people want to live their lives; they don't want to be cooped up in a house. So now we have the demand side of things going up on the back end of the pandemic, as we're in recovery mode, and the supply side isn't revved up enough to meet demand. So we have more dollars in the market chasing goods and services.
Q: Are you seeing Americans across the board 'tightening the purse strings?'
A: I feel as if most households, unfortunately, aren't going to start tightening up their spending until their savings get low enough. And then their debt gets high enough to trigger a negative emotional response for them to say, alright, we need to kind of slow down a little bit.
Q: What are some ways that you and your family are trying to economize?
A: If we go shopping at the grocery store, instead of just making a grocery list and saying, 'alright, I'm gonna go buy these things at the grocery store.' What we'll do first is say, 'alright, well, what's on sale at the grocery store?' And then [we shop] based on what's on sale. So what we're doing is not instead of dictating what we're going to, we're actually taking what's available to us and then making decisions on that to make sure that we stay in budget.
Q: What do you see as a potential timeline for 'normal'? For people who are struggling out there right now,
A: It's very important that we think about this as transitioning into normal is a transition is going to happen gradually. And this is going to be a global thing that we're gonna have to see collectively. I'm thinking the latter part of 2023 into 2024, is as we're coming out of this recovery phase of the pandemic and hopefully into more solid footing, where we begin to embrace what a new normal looks like. And it's very important to frame it that way. Because things may not go back to the way that they've always been.
Q: What is your message to families who are looking at what decisions they'll have to make going forward?
A: I want them to know that sometimes the optimal thing is treading water. And I think that oftentimes, we shame people for treading water and staying in place and preserving their strength because, based on the conditions at the current time, we're not going to make a lot of progress. And that's kind of where we are, and that's okay. The goal is not to regress or lose our position. So it is perfectly alright right now for a household to be treading water. There is no shame or there's no guilt in being able to maintain where you are.
