What exactly will 2009 bring us in terms of businesses closing down for good? Estimates are that hundreds of large, name brand businesses will go under in 2009 due to the economy - which while sad for the workers is not necessarily a bad thing. We have consumed ourselves right into this mess, and with people starting to buy what they need rather than what they want, many of these stores are seeing their customer base disappear. Shopping had become a national religion for too many people and stores took advantage of that fact by duplicating themselves on every street corner…only to find their customer base disappear this year. We should have known that this level of consumption could not be sustained forever, but not too many business owners thought long term or of anything other than profit; they expanded into every nook and cranny expecting to continue to reap the rewards of the “American Way” of shopping our way into the poorhouse. After all, Americans carry $2.56 trillion in consumer debt, with the average household’s credit card debt amounting to $8,565! Well, it’s over for many businesses already as of the end of 2008:
Lillian Vernon Corp.
Sharper Image
KB Toys
Whitehall Jewelers
Shoe Pavilion
Mervyns
Levitz Furniture
CompUSA
Harold’s
Aloha Airlines
ATA
Bennigan’s
Linens ‘N Things
Bombay Co
Skybus
Steve & Barry’s
Did I miss any companies that went completely out of business in 2008? I know there are many, many more that are either filing for bankruptcy or are already in it, so we won’t know if some of them make it or not. Circuit City is one of those companies that is hoping to make it, but I really don’t see how some of these guys stay in business at all. For electronics, we have Best Buy, Buy.com, Amazon.com, Radio Shack, Fry’s, J&R…never mind the big box stores like Target, Walmart, Sears, K-Mart, etc. …and any Mom & Pop stores, I am just amazed at the amount of duplicity in any given product market. Yet for years they all stayed in business and thrived because we could not stop shopping for anything and everything. But this economy is a survival of the fittest competition, and many of your favorite stores will be disappearing in 2009. I lean to the side of “this is a good thing” because I really think this economy is an eye-opener to what we were spending and supporting all these years, and I am hopeful that long term changes and lessons will come to at least a few of us. So…do you think it’s a good or a bad thing?
Yep, no kidding…if you buy a Hyundai and lose your job within the first year of owning it, they will take the car back off your hands:
“If you find that you cannot make your payment because of a covered life changing event, we’ll allow you to return your vehicle and walk away from your loan obligation - and in most cases we will cover most, if not all of the difference,” the carmaker’s Web site says.
I see this as both a good and a bad thing - bad because if you lose your job, won’t you still need a car to get around? But it’s also good because if you cannot afford the car anymore, at least you won’t go into more debt or damage your credit with late payments and the like. Plus, it won’t get repossessed this way. Who knows…what do you think?

photo credit: Adam (adamjinj)
I don’t know about you, but I am getting kind of tired of watching the news and seeing consumer segments encouraging us to go shopping just because there are some deals out there. Between the Christmas season starting in mid-November, Black Friday, Black Monday, Black Friday 2 and now these “pundits” still trying to get us to part with our hard-earned money, I am a little burnt out on the “buy this stuff because it is on sale” mantra. If you don’t need something, it doesn’t matter how much it costs - you don’t need to spend the money for it!
Too many people fall for the “gee, that TV is on sale for 10% less than it ever was before - we should go get one before they are all gone” routine…even if they don’t need said TV. If you or your family does not need whatever a store is selling, it is not a bargain - it is an expense. An expense that could reduce the amount of money you have to spend (or even save) on something important. Would you go buy a new car just because it was on sale? The higher the price tag the more difficult it becomes to rationalize the purchase - but those smaller amounts add up.
Retailers have it hard this season, but I don’t feel that bad for them - I mean, do we really need multiple upon multiple versions of the same store, sitting in the same mall, in every city around the country? Same stores, different names. Best Buy and Circuit City. Bed Bath and Beyond & Linens and Things. Add in the department stores and local stores that sell the same items, and it’s really no wonder that some of these stores are going to go under in 2009 - our insipid shopping habits for the last X amount of years is coming back to haunt both us and the stores themselves. We were able to support all of them at once because we just could not stop shopping, but now many people are unable to keep up with that behavior - there is less money for “extra” things. But that doesn’t stop everyone, obviously, as we are continually being marketed to about how these “sales” are going to save us a ton of money. And sure, they might… but only if you need what you are buying. This is not the time to be buying just for the sake of buying, but rather the time to have an emergency fund, to pay off existing debts, and to watch your money closely. This economy won’t allow for big mistakes, as you could find yourself unemployed or with an empty bank account at any time. Don’t let shopping for bargains be your downfall - buy what you need when you need it, and try to avoid being sucked into the “sale” mentality. If you don’t need it, it’s not a bargain at all.
Have you found yourself falling for this ruse? I know I did when I saw a TV on sale for what seemed like mere pennies. But then I remembered that the TV we have works fine, and I definitely didn’t need a new one!
Ahh, home sweet home. After being gone for 15 days, it feels good to finally be back in our own house. We are slowly getting back into the swing of things and I look forward to getting back to writing. Hope you guys all had a great holiday, now get back to work!
Remodeling This Life talks about all the projects they did on the house in 2008. I love reading about this stuff, so it was nice to see them all assembled in one place!
Cash Money Life discusses some early details of Obama’s plan for the economy. As stated in the post, I hope he avoids sending stimulus checks and instead focuses on job creation - jobs are worth way more than a $1000!
Money Tipper thinks you should be locking in higher rates with CD’s.
Frugal Dad asks if you would sell all your materials belongings for debt freedom. I think I would, if I was in that big of a hole - you don’t own the stuff anyway if you are in that much debt. But I doubt most would see it that way.
Good Financial Cents has the details on your 401k for 2009. Want to know the new limits? Check out this post.
Money Ning wants to know if you switch to frugal mode when you get back from vacation. Never thought of it like that before, but I definitely do!
Almost Frugal talks about how being organized is frugal. I could not agree more!
Gather Little By Little talks home energy with “Propane, Electricity, or Oil - Which one is cheaper?“. We have propane here for our radiant floor heat, hot water, and cooking - but we rarely need the heat due to our passive solar design and orientation. What do you use at home?
Green Panda Treehouse has some tips on jumpstarting your emergency fund and paying off your debt!
The Sun’s Financial Diary is talking ETF’s - building Lazy Portfolios with them to be exact. Don’t know what ETF’s are? Check out this post to find out why they might be a good investment vehicle for you.