Weathering a recession

[dancerjodi]

How would you do? This person has it kind of simplified:
http://marketplace.publicradio.org/display/web/2007/11/06/manion_commentary/

Its a weird balance between comfort and risk. As I've earned more money and purchased more things I've felt more secure BUT also have more to lose. I think I have a healthy understanding of what could be quickly given up - its the debt that's stuck to you (loans, credit cards) that you can't offload easily that can be crippling. I think far too many people consider these niceties as givens or as needs and end up buried (myself included historically).

I'll feel a huge load off my back in the next couple of years when my car loan and student loans are paid off. :)

Comments

[lurfmonkey.livejournal.com]

That commentary is great if you're poor and have no debt. But how many Americans does that apply to?

Debt is a bitch. Just when you think you have it under control, something comes up and you're right back in it. A few years ago, we got rid of all our debt completely - student loans, car, and credit cards, pretty much all at the same time. It was a wonderful feeling. We maintained it for a couple years, but then last year we got hit with lots of stuff at once, starting with $3000 worth of stuff stolen in St. Martin. After that, we had to replace our car, Tammy had to get a root canal and crown, and then her computer died. So we're right back in debt again. With Tammy's income being so unpredictable, it's really hard to budget. The money from the cat book should eliminate the debt again, but who knows when they'll pay it. In the meantime, finance charges rack up.

But my main point is that living debt free is awesome. It's just so precarious. With the recession I don't worry so much about losing my job, but I do worry about my retirement investments. It took so long to get back to where I started after 9/11. I don't want to have to start over again.

[dancer.livejournal.com]

Debt free is awesome. I think the author's point is that a lot of the debt we have (that we drown under) is a result of ourselves buying things that we probably don't need. There's always arguments about whether something is an investment or not, but in the strict sense of existing (having food, shelter, clothing) a lot of the debt that we have were from niceties.

I'm not arguing people should give these things up, as much as be aware of them (and make choices knowingly). I think far too many people just think "ah, I'll finance it" without really thinking of what that will mean 5, 10, 20, 30 or whatever years down the line.

[cris.livejournal.com]

it's also telling that the default option for people who want to have nice things is to take on debt, rather than be patient and save up.

[lurfmonkey.livejournal.com]

It's a tough call sometimes. If you look 5-30 years down the line and try to prepare for that, you tend to miss out on the present. I don't want to end up like the people who save for something that never comes. There's always the risk that something will happen that will shorten your life or make it impossible to enjoy what you saved up for. I totally realize that we're irresponsible with money. No, we don't need the latest tech gadgets or to go on nice vacations, but those type of things help with our mental health, and I don't regret spending the money on them. For instance, our trip to Vegas was totally superfluous, but we had a great time and were able to spend time with you guys that we wouldn't normally get to spend because of our busy schedules. That never would have happened had we stayed home.

I don't encourage debt and living beyond your means, but I don't think watching every penny is necessarily a good thing either. But I guess we're fortunate in that we know the money to cover our debt is going to come. Tammy has several outstanding invoices, but her clients are notoriously slow to pay them. Many people with debt either have no way to pay it off or have no intention to. That's where it gets really dangerous.

[arianasilver.livejournal.com]

There's more to our economic woes in this country than just the very real threat of recession. The cost of food is increasing more rapidly than usual due to "sustainable" ethanol fuel increasing the price of corn, which increases feed costs and it trickles down. Add that to the lack of rain which has hurt crops & milk production plus the increase in fuel and the situation gets bleaker. A gallon of milk here in NH has gone from $2.35 a gallon to $2.89 a gallon in the past two months. $.50 doesn't seem like a lot, but it adds up. The cost of fuel goes up constantly, and its impossible not to fill the tank to get to work, at least in our case where public transportation isn't much of an option. Plus with winter coming heating costs will be on the rise. So for those who are already poor, times are getting tougher regardless.

We're working on paying off student loan debt, and aside from that that's the only debt we have. Our cars are paid for (and we will never finance a car again unless necessary), we don't have a mortgage and won't have one. We keep a credit card now for "emergencies" that I put gas on every month and pay off. We avoid using credit unless absolutely necessary. If we want something, we save for it and buy when we have the money, instead of paying interest for instant gratification.

We're working on emergency savings, but our money is pretty much counted for every month in rent & utilities. Whenever we get a balance in the emergency fund, a car needs repaired, something breaks and needs replaced, etc. so it seems we can't get ahead. But that's life I suppose.

There are things I'd like, like a chest freezer, which I could easily put on the credit card. But I'd rather save and buy it outright than put it on credit.

[greylady.livejournal.com]

Well, since I'm still not recovered from the last one, I'd probably end up rocking back and forth in a ditch somewhere.

San Jose 2002, dotcom and biotech crash. Once was enough, thanks. Another 18 months without a job would drive me un-sane.

[bluemetalpig.livejournal.com]

LOL she's probably single without kids. Meaning, she doesn't have to pay very much in the way of expenses or planning for the future. Good for her I guess, but she's pretty smug to be sitting there saying that she'd be satisfied on a minimum wage job. All I can think is: what?? That's kind of sad to me.

I have to have a car because I live away from Jasper, and getting rid of my cell phone isn't an option either. I'm all for frugality but she seems kind of wierd. There's more to life than just survival.