If you work in the finance or procurement department of a company these days, there's no doubt that you're being asked to scrutinize all costs, looking under desks and in the quietest corners for savings opportunities. You're probably also looking for ways to reduce the amount of working capital required to run the business. This type of thinking is also rapidly permeating households. In fact, according to a recent story in the Chicago Tribune the personal savings rate is at the highest level its been in recent years.
In other words, individuals, like companies, are spending less and looking to save more. To be specific, "The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent [in May], the highest level since December 1993". Having observed the behavior of both friends and family, it's remarkable how personal savings strategies are mirroring those of the workplace. Consider that individuals and families are cutting back on trips and expensive dining (though not cheaper meals) just as companies are reducing T&E travel budgets. And think about how coupon usage/redemption is on the rise as well (just as companies renegotiate contracts with suppliers and negotiate discounts and rebate programs, coupons are a proxy for a consumer's willingness to invest time to save money).
Without question, Spend Management thinking is beginning to capture our attention for most of our waking hours -- whether it's at home or in the workplace. For me, this is also a leading indicator of a future return to politics and policies that practice less interventionism, entitlement and massive and wasteful spending. Even though I disagree with much of his economic philosophy, I do believe John Maynard Keynes got it right when he quipped that "It is better that a man should tyrannize over his bank balance than over his fellow citizens". After all, a public that is saving more will eventually become increasingly concerned that their government is taxing and wasting their hard fought savings dollars with little or nothing to show for it.