From 1989 to 1999 the answer to this was pretty murky. Citizens of 1989 USSR had pretty stable economic lives, although they had access to very little of the consumer goods that we take for granted, and had to deal with the famous long lines and rationing for what they could get. IIRC there was a five-to-ten year waiting list for an ordinary family to save up and buy a car. The black market made up a small but significant proportion of J. Random Russkie’s economic activity.
The transition to capitalism was a big mess known as “shock therapy,” championed by certain personalities inside the new Russian government and Western economic advisers. Ideally, state enterprises were turned into private companies, and the interested stakeholders (employees, family, management) got shares in the new companies. In practice, well-connected people got better deals, and millions of new shareholders had no idea what they could possibly do with share ownership, so they sold off their portions for a pittance. Some entrepreneurial people with few scruples made a killing off of this combination (corruption and ignorance) and became “New Russians” (the late-1990s nouveau riche). But our J. Random Russkie was probably worse off in 1999 than in 1989: his real income suffered, he had to turn much more to the black market, and the national market as a whole was in the shitter due to the depression in oil prices. In fact things were bad enough that there was some fear that the Communists would win the 1996 elections. (They didn’t.)
Putin’s vital project was to restore order and then growth to the economy. His government sued, arrested, imprisoned, and nationalized many of those New Russians and their companies. The boom in oil prices, plus Russia’s strategic position as an energy supplier to Europe, made a handsome profit for the country and GDP has grown a few times over since 1999. Extractive industries (oil and minerals) subsidize much of the rest of the economy through official and unofficial pathways. That’s not to say that the other sectors aren’t improved, either, it’s just that the far-and-away dominating economic story is oil. Modern Russia is often referred to as a petrostate.
J. R. R. is easily better off in 2012 than in 1999, and if he lives in a city, he probably has a job, decent (if very small) apartment, and just enough clothes, food, and toys to keep him happy. Compare to the average American - a guy who lives in a house that the bank lets him pretend he owns; has a car; and an overabundance of food, clothes, and toys.
The health of the economic fundamentals is open to debate - there is still a lot of corruption and underground economic practices; average individual income is low; new business starts are difficult; foreign investment has cultural hurdles to overcome. But as long as oil stays above $X/bbl (generally thought to be ~$70), the economy will keep plugging along.
I took several college courses on Russia and I hope I’ve explained it well and simply enough here. If you’re interested some of the books that I liked are Russia’s Virtual Economy, How Russia Really Works, and The Soviet Experiment. PM me and I can media mail those to you if you’d like.