The GLBT Agenda in Massachusetts.

For millions of middle-class Americans, the recession has forever changed spending habits and forced a reconsideration of basic expectations — like retirement

Marianne Stravinskas (left) and her partner, Liz Page, have told their daughter, Chloe, she will have to work to help cover college expenses.
Liz Page’s event planning business, the main support for her family, was in crisis during the recent recession, and survival meant borrowing, draining savings, and cutting household and business expenses.

Now, with the recession over and business rebounding, the adjustments for Page, her spouse, Marianne Stravinskas, and daughter, Chloe, haven’t ended. Retirement may not happen. Paying for their daughter’s college remains a question. Even when they tried to refinance the mortgage of their Milton home, they ran into roadblocks in this era of tight credit.

“I used to think, life is good, it will all work out,’’ said Page. “I still think life is good, but I’m a lot more cautious. It’s now about hunkering down, and doing what needs to be done.’’

The Page-Stravinskas family is among millions of middle-class households adjusting lifestyles and expectations following a recession that undermined home val ues, eroded investments, and slashed the net worth of US households by more than 20 percent. The result, analysts say, is an altered economic landscape that will require middle-class Americans to work longer, save more, and spend less.

The outlook is hardly rosy. The Center for Retirement Research at Boston College, for example, found that 40 percent of middle-aged Americans plan to delay retirement after the financial crisis sliced as much as $2 trillion from the value of 401(k)s and similar retirement accounts. Fidelity Investments, the Boston mutual fund giant, reported that rising tuitions and reduced stock values mean parents are on track to cover just 16 percent of college costs, down from 24 percent in 2007.

Even ridiculously low mortgage rates are providing limited relief as tight credit, depressed home values, and high household debt make it difficult to refinance — and more difficult to pull out cash. Refinancing activity is half that of 2003, the last time mortgage rates fell to historic lows, according to the Mortgage Bankers Association. Cash-out transactions have plunged to the lowest levels since 1985, according to Freddie Mac, the government-backed mortgage buyer.

For much of the past 25 years, booming home and stock values combined with easy credit to support middle-class ambitions for nicer homes, comfortable retirements, and college educations for their children, said Mark Zandi, chief economist at Moody’s Analytics, a forecasting firm. Those days are over.

“The lesson of the last three years,’’ Zandi said, “is that households, in particular middle-class households, will have to significantly adjust their financial behavior.’’

Page and Stravinskas have adjusted theirs. Going out to dinner — which they did once a week in brighter times — doesn’t happen anymore. Neither do clothes shopping sprees. They have cut up three of the four credit cards they once used, and they’re paying down the $20,000 they borrowed through a home equity line of credit to keep Page’s business afloat.

That debt prevented them from refinancing their 6 percent mortgage when they applied about six months ago. “We no longer think of the equity line as free money,’’ Stravinskas said.
They’re adjusting expectations, too. They have told their 10-year-old daughter that if she wants to go to college, she will have to work and contribute to the costs. Their retirement hopes, already tenuous, are complicated by federal law, which doesn’t recognize gay marriage and precludes them from Social Security survivor benefits if one dies. They have given up dreams of long retirements on the beach.

“We’ve come to the conclusion that we’ll have to work as long as we are physically able and the workforce will have us,’’ Page said.

Making such adjustments isn’t easy, said Stuart Armstrong, a Boston financial planner, who these days finds himself telling clients, “Retirement is overrated.’’ Getting to retirement — and other financial goals — increasingly requires planning, working, saving, and reducing expenses, Armstrong said.

The most direct route is cutting costs, Armstrong said. Even small expenses — like buying a coffee instead of filling a commuter cup at home — can add up. So can travel and dining out.

Armstrong advises clients to reset priorities and think about what they really need. He sometimes reminds them that previous generations got along fine with one car, one television, and one vacation a year. “They still long for the days when they could just spend, spend, spend,’’ Armstrong said. “Slowly, but surely, they are accepting we are in a different place.’’

And a different place may not be such a bad thing, said Page and Stravinskas. The recession for them was harrowing. Revenues at Page’s business, Liz Page Associates, plunged 40 percent in 2009, forcing her to lay off one of three employees and cut hours for the others. Stravinskas, who owns a small catering company, Nibbles Catering, was able to boost sales by stringing together small jobs, but far from enough to cover the declines in Page’s business, which accounts for about two-thirds of their income.

All told, their income fell by about half. The situation became bleak enough that they discussed when they might have to sell their home. “Our initial reaction was fear,’’ Stravinskas said. “But you just had to hold on.’’

Page, 60, and Stravinskas, 51, have been partners for 14 years, and married since gay marriage became legal in Massachusetts in 2004. They adopted their daughter 10 years ago.

Last year’s struggles, they said, forced them to focus on what they had. Even as they cut back, they knew other people faced worse, losing jobs and homes. Designer clothes and restaurant meals didn’t seem so important. “We had our health, our love, and family,’’ said Page.

Page’s business has rebounded, and is on track for a record year. Still, they continue to scrimp and save, paying off debt, building cash reserves, and planning to try again to refinance their mortgage.

Page recalled her mother, who grew up in the Great Depression and, decades later, continued to save scraps of aluminum foil. Page said she used to laugh at her mother’s thrift.

Not any longer.

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