Miriam Kreinin Souccar

Buck Ennis

Filed Under: 

Business Lives 

They don't take cabs anymore, and movie nights are out. They are canceling cable and turning off air conditioners. Even a frozen yogurt topping is deemed a luxury.

Meet New York's newest penny-pinchers. These people haven't lost their jobs, and they don't even work on Wall Street. But the implosion of major investment banks, the continuing mortgage crisis and warnings that the economic downturn will worsen have scared working New Yorkers into doing everything they can to cut costs.

"Since the economy has gotten really bad, I have stopped shopping completely," says Emily Ryan, a project associate at New York University's Langone Medical Center. Ms. Ryan has even started a blog on how to get freebies in the Big Apple. "I am looking to save money in every aspect of my life."

There is, of course, reason to worry. Revenue for Wall Street firms plummeted 63% in the first half of this year, and layoffs are expected to top 33,000. Gov. David Paterson is projecting budget gaps totaling a shocking $26.2 billion over the next three years, a figure he now says is likely to grow in the wake of Lehman Brothers' bankruptcy. And the news seems to get worse every day.

New Yorkers, who long felt immune to the mortgage crises dogging the rest of the country, and are notorious for living it up and saving little, say the Wall Street meltdown and the constant media coverage of the recession are propelling them into action.

Worrisome numbers

Ms. Ryan was taking much of the economic news in stride until a few months ago, when it hit home literally. Her mom, who lives in Texas, was forced to move closer to her job to save money on gas. Since then, Ms. Ryan has canceled cable and stopped eating out; now she makes homemade gifts and greeting cards for her friends. She even considers the subway too expensive for her new frugal state of mind and bikes everywhere she goes from her Upper West Side apartment. One unexpected perk: She has lost 17 pounds in the process.

Tiffany Winbush, a public relations specialist at Katz Media Group, doesn't know anyone who works at Lehman Brothers or any other troubled financial firm. Still, she and her husband, an entrepreneur, have stopped going to the movies, opting to rent DVDs instead. Rather than going clubbing on the weekends, their friends now meet at each other's apartments. And for the first time, Ms. Winbush began clipping grocery coupons and buying, gasp, nonbranded products.

The couple is putting bigger-ticket items on hold. They were planning to move to a one-bedroom in their Battery Park neighborhood, but after adding up the moving costs and the rent increase, decided to renew the lease on their studio.

"I cannot recall another time like this," says the 26-year-old Ms. Winbush. "In the past, if we wanted something, it was "Go for it,' and now it's a thought-out process. You have to consider that with everything going on in the financial world, it will eventually come around to affecting you."

Experts say these savers' reactions are normal.

Cutting back feels better

"There is some psychological comfort in taking action, even if you can't see any impact on you personally," says Larry Compeau, a marketing professor at Clarkson University and executive officer of the Society for Consumer Psychology. "People will cut back for no other reason than it makes them feel they are doing something, even if they don't have to."

To remain chic while saving cash, one New Yorker rents dresses for weddings and charity events instead of buying them. Cheryl Metzger, marketing manager for ESI Design, rented her first dress at Ilus, a new rental boutique on Elizabeth Street, this summer. Dresses at the shop cost around $100 for a three-day loan, versus nearly $1,000 to buy.

"I'm nervous about the economy and am trying not to spend as much on frivolous items," Ms. Metzger says.

In some cases, these attempts at frugality are causing friction among couples. Eric Jason, an events manager, started watching every penny a few months ago, when his 401(k) started dwindling. Though he and his girlfriend agreed to move in together—in part to save money—and stop taking cabs to work, they fight over just how parsimonious to be. Mr. Jason wants to eat at home or grab a burger at the neighborhood bar, while his girlfriend still wants to go to trendy restaurants.

"She definitely wants to spend a little more," Mr. Jason says. "But I'm reading about layoffs every day."

The twosome did agree on the biggest sacrifice of all, however. They were offered a relative's apartment in the Riverdale section of the Bronx for $800 a month and are now planning to leave the Upper East Side.

"I never thought I'd live in Riverdale, but it's becoming a little more attractive as the days go on," Mr. Jason says.

SURVEY SAYS
How everyday folks are cutting corners

Increasing use of coupons 58%

Reducing energy consumption 57%

Not taking as many vacations 43%

Selling something that's not needed 35%

Canceling memberships in health clubs 15%

Not cutting back at all 14%

Source: HSBC Direct National Poll
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SHOESTRING TIPS

EMILY RYAN HAS GOTTEN SO GOOD at saving that she decided to share her secrets through a blog offering daily tips on all manner of freebies. She posts several listings each week at http://notrustfund.blogspot.com.

Some of Ms. Ryan's ideas include buying makeup by E.L.F. at www.eyelipsface.com/shop.asp, where every product is $1.

She also recommends getting free haircuts at The Bumble & Bumble Institute by participating in their styling classes, and buying items like nuts, almond butter and granola in bulk instead of in more costly packages.

Rather than buying clothes, Ms. Ryan suggests that gals host clothing swaps, aka naked ladies parties, where women put their castoffs in a pile on the floor and everyone dives in.

COMMENTS? MSouccar@crainsnewyork.com