Downwardly Mobile: Living on Less in the City An Upper East Sider Negotiates Job Loss; Discounts on Haircuts, Dental Work

http://online.wsj.com/article/SB10001424052970204621904574248033091327704.html Several weeks ago, Rochelle Rachelson walked into a salon near her Upper East Side apartment in New York City and inquired about their cheapest cut. “$63,” came the reply. “Too much,” said Ms. Rachelson. The receptionist came back with a $48 cut from a junior stylist. “That’s still too much,” Ms. Rachelson replied, “I’m... [more]

http://online.wsj.com/article/SB10001424052970204621904574248033091327704.html Several weeks ago, Rochelle Rachelson walked into a salon near her Upper East Side apartment in New York City and inquired about their cheapest cut. “$63,” came the reply. “Too much,” said Ms. Rachelson. The receptionist came back with a $48 cut from a junior stylist. “That’s still too much,” Ms. Rachelson replied, “I’m not working.” View Full Image Hanna Melin “How about a student for $10?” “I’m in,” Ms. Rachelson said. It was a typically hard-won triumph for Ms. Rachelson, who has had to struggle for things she once took for granted ever since she went from living on a $57,000-a-year salary to living on $16,000 a year in unemployment checks. One remarkable thing abou t this recession is the speed of many people’s transition from shopping at Saks to cutting out coupons. People with lucrative professions and vacation homes are learning that they have been living closer to the edge than they thought. As a result, many of them are reassessing which expenditures are necessities and which amount to luxuries—and they are learning new consumer skills, such as bargaining, to help them afford what they can. The transition has been harsh for Ms. Rachelson, a 58-year-old woman who once enjoyed daily restaurant meals, weekly manicures, regular shopping trips to Bergdorf’s, and summers in the Hamptons. Ms. Rachelson was never wealthy, but for many years she worked as a project manager with an office-furniture company, living in a rent-stabilized apartment at 80th Street on Manhattan’s upscale Upper East Side. She had a closet full of well-made clothes and more than 100 pairs of shoes. “Everything had to be from Italy,” she says. “I have a good eye.” But then, two years ago, the economy began to falter, and Ms. Rachelson was restructured out of her job with the office-furniture company. She had never been out of work for more than a few weeks, so she was surprised when it took several months to find another job. She landed her next position, albeit a temporary one, as a result of her luxury shopping habits: She was hired as a sales specialist at Fortunoff, the jewelry and home retailer. “I’d been shopping there for years—I knew the products,” she says. When that holiday-season job ended, she wound up back on unemployment. Since then, she has been living on her unemployment payments, grateful for several extensions of the program’s time limits. She has had regular job interviews but no offers. ‘You Still Got That Basement?’ “Apparently, I’m unemployable,” she said recently with a wry humor that often belies how concerned she is. “I say to my friends, ‘Hey, you still got that basement?’ ” she said another day. “I make jokes.” So far, seven million jobs have been lost in the U.S. during this recession, according to the Department of Labor. The national unemployment rate climbed to 9.4% in May, and jobless rates are already in the double digits in Michigan, Ohio, California and other states. Discuss How have your lifestyle expenditures changed during the recession? The number of the long-term unemployed—people who, like Ms. Rachelson, have been jobless for 27 weeks or more—has tripled since the beginning of the recession to 3.9 million. Despite a few signs of economic improvement—such as rising home prices in parts of the country—most forecasts suggest the recession is far from over. By the time it does end, many of us are likely to have permanently altered the way we make daily consumer choices. For Ms. Rachelson, there are no more weekly manicures. The annual vacations to Acapulco and summers in the Hamptons with a rented car are a thing of her past. “I took a house in the Hamptons for 33 years,” she says. “For me, it symbolized a season. People don’t say, ‘How’s your winter?’ They ask, ‘What are you doing for the season?’ ” In those days, she used to call weeks in advance to secure reservations at the hottest restaurants, she recalls with relish. She ate in “anything that was new, all the new places,” she says. Now, she spends summer weekends in Manhattan. For fun, she sees her friends and goes to movie matinees, buying tickets with a senior-citizen discount. Ms. Rachelson has changed the way she thinks about shopping. Though she always liked a bargain, she used to shop without qualms. One time, a woman friend didn’t see a need for new shoes while the two were out shopping. “I said, ‘What are you talking about? Aren’t you a woman? Who needs anything?’ ” Ms. Rachelson says. ‘I Work the System’ Now, she has replaced shopping at Bergdorf’s and Bloomingdale’s with trips to Bed, Bath & Beyond. She asks friends to collect that store’s $5-off coupons, which she stores in a zippered pencil case full of coupons for makeup, toiletries and food. “I work the system,” she says. Indeed, she has become canny about maintaining her small luxuries. She cooks a lot now, but to replace her dinners out, she takes advantage of the $5.95 lunch specials at restaurants in her neighborhood, which are served until 5 p.m. Ms. Rachelson shows up at 4:50. “I get the lunch price for dinner,” she says. Maintaining her looks—finding ways to get her hair cut and colored, her makeup done—is a necessity when she’s job-hunting. But it’s also a point of pride: She’s been blond, pretty and vivacious all her life. Still, she has had to compromise. She recently replaced her professional highlights with $5.79 hair color she applies herself and buys her makeup at drugstores. A morning coffee at Starbucks, once a daily ritual, is now a carefully managed luxury. Each morning, Ms. Rachelson heads down to Starbucks carrying a cup of yogurt or a bowl of oatmeal. She buys the cheapest coffee for $2 and reads the paper for several hours (the shop’s personnel have never objected, she says). When she discovered a cracked tooth last month, Ms. Rachelson asked around until she discovered it’s possible to have the expensive repair work done at a discount at New York University’s dental school. She sold the 14-carat-gold jewelry she received for her “Sweet 16” birthday to raise money for the down payment on the $2,800 repair job and is currently trying to figure out how she’ll raise the remaining $1,400. It would be cheaper to simply have the tooth pulled, but she fears that having a missing tooth would make it even harder for her to land a job. Ms. Rachelson recently applied for a sales position at Bed, Bath & Beyond. “If I get through this,” she says, “I won’t return to that lifestyle. I don’t need 140 pairs of shoes. I need health care.” —Contact me at Christina.Binkley@wsj.com; Twitter.com/BinkleyOnStyle; or WSJ.com/Community. [less]