Many vow to spend less

• By CHANTE DIONNE WARREN
• Advocate staff writer
• Published: Jan 1, 2009 - Page: 1B - UPDATED: 12:05 a.m.

• Print
• Email
• Save
• Reprints
• Twitter
• Share

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

Exotic vacations, dining out, frivolous purchases and credit card sprees are fast losing their appeal with some area residents who plan to make 2009 the year of frugality.

Among them are Watson residents Jennifer Horne, 41, a real estate agent, and her husband, Tim Horne, 40, a designer for an engineering firm. They’ve already begun cutting back on dining out and don’t plan to make big purchases this year.

“If we can’t pay cash for it, we won’t buy it. We are not going to finance anything,” Jennifer Horne said, noting that the car they bought last summer will be their last major purchase for a while.

Several financial educators and advisers warn that the national recession will likely bring more bankruptcies, job instability, cutbacks in working hours, fewer raises and higher insurance premiums.

“All the rules of personal finance and getting and managing credit have changed. This is the time to hunker down,” said Catherine Williams, vice president of financial literacy for Money Management International.

Economic fallout across the country resulted in hundreds of thousands of job losses, a surge in home foreclosures, stock market and pension losses, and a drop in holiday season retail spending.

Louisiana is not immune. Gov. Bobby Jindal announced a plan Tuesday to cut $341 million in statewide spending that could result in laying off state workers. Dow Chemical Co. has planned to close two of the 28 units in its complex of plants in Plaquemine.

“I expect to see more bankruptcies in ’09,” said Elizabeth Hall, a personal bankruptcy lawyer in Baton Rouge who also specializes in money management. “Louisiana has been spared, but the problems with the rest of the country are finally coming here.”

The Hornes said they made changes in their spending habits about two years ago.

They stopped eating out as frequently and avoid making unnecessary road trips, Jennifer Horne said.

A surprising part of the family’s spending was wasted on “the little nothings,” she said.

“It took us so long to get out of the hole with credit. You get caught up in wanting things that you really can’t afford,” she said. “We tightened up and started paying things off. We can buy the things we want now because we don’t have the credit card payments.”

During those years of overspending, Horne said, she often panicked. The Hornes visited with an E Federal Credit Union loan officer and financial adviser who helped them craft a financial plan to trim debt, cut back spending and restore their credit.