Anna Newell Jones knew she was living well beyond her means when the Great Recession struck: She was $24,000 in debt. What surprised her, though, was how quickly she climbed out of that hole during the agonizingly slow recovery.
She had a lot of work to do to cut costs, start saving and stop being what she called "a slave to the economy."
Before the Great Recession, most of her $28,000 annual salary as a court clerk went to paying the mortgage on a one-bedroom duplex in Denver. She had turned to credit cards to pay for fancy dinners, vacations, furniture and more.
"I had always thought that a recession was something that happened a long time ago and it wouldn't happen in my lifetime," Jones, 34, said. "So it really was a big wake-up call as far as 'Can I afford the life that I'm living?'"
She learned she couldn't.
The Great Recession ended five years ago this month, but the severe pain and fear it caused continue to haunt Americans and have led to major changes in how Jones and many others spend and save.
Baby boomers who had hoped to retire remain on the job to rebuild battered 401(k) plans. College graduates live with their parents as they work at low-paying jobs and look for better ones. U.S. companies outside the banking sector sat on a record $1.6 trillion in cash at the end of last year, afraid to expand for fear the economy will tank again.
More than anything, the recession triggered a simple but profound change — people are spending less and saving more. That's a key reason the recovery has been so sluggish, economists said; consumers account for about two-thirds of all economic activity.
Their adjusted behavior, though, has had a positive effect as well. Many Americans have repaired their finances by ending bad habits developed in the years leading up to the recession.
Soaring housing prices in the mid-2000s combined with easy-to-get loans spurred U.S. households to borrow at record levels. By 2008, they had piled up an all-time high of $12.7 trillion in mortgage, credit card and other debt.
At the same time, the percentage of disposable income that people saved plunged to a historic low as rock-bottom interest rates discouraged them from keeping money in the bank.
With such lopsided finances, the housing market collapse and subsequent economic crash sent many people into a frightening world of underwater mortgages, foreclosures, unpaid credit card bills and debt collectors.
Even people who avoided those problems faced financial trauma as the value of their homes, retirement plans and investments plummeted.
"The crash was more or less inevitable," said William Emmons, a senior economic advisor at the Federal Reserve Bank of St. Louis. "The rate at which people were borrowing and spending was just really headed for trouble."
Altered habits from the searing experience had a major effect. Households have reduced their overall debt by more than $1 trillion from the record high. And the personal savings rate of 4% now is double the all-time low hit in 2005, though a survey released Monday found that many people still don't have enough money put away to deal with a lost job or other emergency.
In a recent Gallup poll, Americans said they preferred saving to spending 62% to 34%, the widest margin since the company began asking the question in 2001.
"One of the things I've been concentrating on is putting money aside so I'll be prepared," said Eric Rossman, 38, of Wappingers Falls, N.Y., who works in computer security.
The mortgage on his two-bedroom condominium remains underwater. And with two children — one requiring two heart surgeries — Rossman and his wife have learned they need to save for a rainy day.
"We've become much more focused on having enough money should an emergency happen," he said, noting they've cut down on eating out and other "frivolous spending."
"You still have to have your occasional night out," Rossman said. "But it's not every meal."
Before his first son was born in 2011, Rossman and his wife had about $2,000 saved, and they sometimes would dip into that money for routine expenses. Now they've got $10,000 in the bank.
Households are in a much different place than they were five years ago, and the changes could be long-lasting, said Fabian T. Pfeffer, an assistant professor at the University of Michigan's Institute for Social Research.
"What happened during the Great Recession in terms of wealth and saving was so earth-shattering, it's hard to believe that didn't change attitudes long-term," he said.
In Denver, Jones was saddled with $24,000 in debt and went on what she called a "spending fast" in 2009. By eliminating all but the most vital purchases, she paid off all her bills over 15 months. Then she started saving.
"I was able to recession-proof my life by taking control of my finances," said Jones, who has since married, had a baby and bought a $169,000 house in Denver with a 20% down payment to replace the duplex she had bought with no money down at the height of the housing boom.
"Even now, if the economy tanked again, we'd still be secure in our financial situation," she said.
As the economy and her own finances have improved the last few years, she has loosened her spending. She sold her duplex to help with the home purchase. But, she said, "I always am worried I'll slip back into my old ways."
Jones has tried to prevent that by blogging about her experiences at AndThenWeSaved.com. She's one of dozens of people who have taken to the Internet to chronicle efforts at cutting their debt since the Great Recession.
Because so many people found themselves in dire financial condition, "a lot of the shame was lifted and we were able to have a conversation about it," Jones said.
The Great Depression in the 1930s had a similar effect on people's spending habits, producing a generation of frugal Americans traumatized by the experience of bread lines and bank failures.
The 2007-09 recession was the worst downturn since then. But even though the scars remain, there are signs that some bad habits could return as the memories fade.
Total household debt rose $129 billion from January through March, the first time since the recession it had increased for three straight quarters, according to the Federal Reserve Bank of New York.
Although debt remains down about 8% from the 2008 peak, it is up about $500 billion since hitting a post-recession low a year ago.
At the same time, the personal savings rate, which quadrupled during the worst of the recession to more than 8%, has been moving down again, Commerce Department data show. It's now less than half that recent peak level.
Such statistics have led some experts, such as Mark Zandi, chief economist at Moody's Analytics, to believe that the recession is unlikely to have the profound long-term impact on consumer finances that the more severe Great Depression caused.
Households hunkered down, spending less and saving more through the depths of the Great Recession and the early part of the tepid recovery.
But now Americans are starting to feel more confident in taking on some added debt. Over time, they'll continue moving away from the sharply higher saving and tamed spending of the recession and its aftermath, Zandi said.
They won't return to the profligate ways of the boom years, but to the more reasonable levels of spending and saving they engaged in before the housing bubble triggered that huge increase in debt.
"We kind of lost our minds collectively and borrowed very aggressively, and lenders lent very aggressively," Zandi said. "The Great Recession shocked us back into normalcy."