One of the more interesting indicators of the current economic problems facing many people right now is the incidence of more buying when the paycheck arrives. True, many people in any economic climate wait until they get their paychecks in hand (or direct deposited into the bank) before going shopping, but apparently there has been an increase in this behavior. With the recent increase in food prices, and with recently high fuel costs, it is no surprise that people are beginning to run out of money before they receive their next paycheck.
Wal-Mart is using baby formula as an indicator that more people are beginning to live paycheck-to-paycheck, reports Reuters:
On Tuesday, Castro-Wright said Wal-Mart has noticed a spike in sales of baby formula when checks are issued at the beginning and the middle of the month — a trend that suggests consumers are rushing to buy basic necessities when they have cash.
Cutting household expenses
Anecdotal evidence, as well as hard retail numbers, are showing that people are starting to cut back in terms of household expenses. This is a good sign, in general: Cutting back on luxuries and wants is necessary in order for us to weather the recession. Unfortunately, there are probably increasing numbers of people who are also cutting back on things they need.
The fact of the matter is that now (well, actually, months ago) is the time to take a long, hard look at your priorities and your expenses. If you aren’t in trouble yet, taking steps now to limit your unnecessary spending and shore up your emergency fund are things you need to start doing so that you are prepared.
If you are already in financial trouble, now is a good time to take a better look at what you are spending your money on, and maybe seek help from relatives, charity, and the government. But only after you have done what you can to prioritize your spending and cut back where possible.