Are things really tighter for the average person due to the economy?

[Freejooky]

I don't really buy it. For the past year or so, everyone seems to be hung up on how "bad" the economy is and how they're "making ends meet." You especially tend to hear this about middle-class suburban people.

Why? How are things "tighter" for them "because of the economy?"

I don't really buy it. I was broke before the craziness of the past year, and I'm still broke, but my lifestyle and general expenses haven't changed one bit. Sure, groceries are a little bit more expensive, but that's about it. Nothing really feels different to me other than a bunch of people seem to think that they're suddenly way worse off than they were before and can't shut up about how "tight" things have gotten.

Is it just gas? Is this suburban two-car commuting families where mom and dad are paying a ton more just to get around everywhere, because everything is sprawl? I live carless in a city, so I don't really get hit by that. The bus and train are fine for me.

For the record, I understand that things like retirement and investments may be fluctuating like crazy, but that's not "things getting tighter" or influencing take-home pay or day-to-day lifestyle.

[Bob Ducca]

Yes, things are MUCH tighter for us. Gas is part of it, as are groceries. Most people have a pretty tight budget that doesn't allow for a lot of extras anyway. When things that you have to buy increase in price by as much as gas and groceries have been increasing - you feel it.

The industry I work in, advertising, is getting beat to hell due to the economy. Companies are hurting and can't afford to spend as much money on advertising, so people in my industry - including myself - are getting laid off right to left.

I got laid off due to the economy - plain and simple. I'm still collecting severance so the layoff hasn't affected our budget yet, but it will soon enough.

You say you take the bus and train, expect rate hikes and route cutbacks soon if you haven't had them already. The economy effects everyone.

A lot of what's happening w/ the economy hasn't even "trickled down" to the average person yet.

[Peanut Gallery]

I'm pretty much with the OP, but I realize I am kind of an exception. I have little debt, no investment, little savings, a stable job, and love renting. My only debt is a small car loan from a solid bank that so far isn't affected (USAA ... fight my ignorance, but they seem to be above the fray). The bank I use for checking (WaMu) failed, but it made no difference whatsoever in my life. The only real risk I feel exposed to is three or four steps removed from me. While it is nice that I'm not hit by the Greatest Depression!!1! yet, it might only be because I was 'depressed' to begin with :p

But most important ... absolutely key ... I have no intention of ever having children. If I did, I'd have to take everything much more personally, and would feel more like my family was being directly screwed.

[erislover]

I've somehow managed to lose about $200 a month. I don't keep very exact budgets or track my spending, but I've had the same salary for three years and I am very much aware of my spending limits on an intuitive level. I've overdrawn twice in the last six months whereas I hadn't overdrawn for years and years.

Something sure as hell moved under my feet without my noticing. I'm thinking it is food prices, primarily, though a cigarette tax increase probably didn't help. (Not gas, as I buy about one 11 gallon tank a month. Prices would have to quadruple before it touched me.) I've since cancelled cable and decreased saving in an attempt to maintain my reckless lifestyle.

[mswas]

Things are tighter for me, but not because of the economy. I had some paper losses when my Google and Apple stock tanked. I had intended to sell right about now, and at this point won't. So I feel that. In terms of my day to day though, things are tighter because of a change in my personal circumstances and for no other reason.

[An Arky]

Food is more, gas is more. We don't use all that much gas, living close-in and convenient as we do. We are OK with the extra food cost. We bought our house 10 years ago, and are still waaay ahead, equity-wise.

My 401k dropped, but I still have time to catch up.

The only thing we have to fear is fear itself, but that one's a bitch, especially when other people's fear is dragging you down.

I wish we would stop focusing so intently on all those chickenshit moneychangers. They've already been proven incompetent, and we really need to pry their hands off of the controls.

[kdeus]

After a mandatory job-related move in 2007, I have been completely unable to sell my house. Not "I can't get the price I want" -- I can't sell the house. I've had three contracts, but all three of them have fallen through (one unable to sell their own house, one unable to get financing, and one crazy person).

"Two mortgages month" is not a holiday I enjoy.

[gonzomax]

In Detroit area there are foreclosed homes in every area. You walk down the street and empty houses are frequent. Restaurants ,theaters, stores, bars .barbershops.etc closed. It is ugly. Good jobs are gone everyday and very little chance of getting a new one. People are depressed. The area is depressed. Most people see little hope. Yes indeed things are tighter.

[IdahoMauleMan]

I've somehow managed to lose about $200 a month. I don't keep very exact budgets or track my spending, but I've had the same salary for three years and I am very much aware of my spending limits on an intuitive level. I've overdrawn twice in the last six months whereas I hadn't overdrawn for years and years.

Something sure as hell moved under my feet without my noticing. I'm thinking it is food prices, primarily, though a cigarette tax increase probably didn't help. (Not gas, as I buy about one 11 gallon tank a month. Prices would have to quadruple before it touched me.) I've since cancelled cable and decreased saving in an attempt to maintain my reckless lifestyle.

That doesn't sound reckless. That sounds like fun!

Maintain. Maintain like the wind.

[rocking chair]

about 2 years ago i noticed that you needed to get 30 dollars out of the atm instead of 20, now it is 40 instead of 20. salary raises can't keep up with that.

also the laid off thing and trying to find a new job. i managed to squeak through the gwh bush admin., got caught on the gw bush admin.

[Knorf]

Way tighter here. Higher gas prices and everything that leads to (more expensive food, etc.) are killing me.

[Celyn]

I don't really buy it. For the past year or so, everyone seems to be hung up on how "bad" the economy is and how they're "making ends meet." You especially tend to hear this about middle-class suburban people.

Why? How are things "tighter" for them "because of the economy?"

I don't really buy it. I was broke before the craziness of the past year, and I'm still broke, but my lifestyle and general expenses haven't changed one bit. Sure, groceries are a little bit more expensive, but that's about it.

Yes, I do notice it a lot. All right, perhaps I do not fit into your question, as I am poorer than average, but I can tell you that when what you have is a bit "less", really, than average, then then more of whatever you have proportionately goes on food and electricity. And I do notice that.

I do certainly notice because these are things I cannot do very much about, although certainly I am trying so to do and will continue so to do. Meanwhile a few "disgraced" (heh :rolleyes: ) bankers might be asked to leave their jobs but they will have security of their old salaries to to live on. Or perhaps sell a holiday home or a car. I see that sometimes newspapers run little vox pop things asking whether one has cancelled plans for a foreign holiday this year. Eeeeeekk! Foreign holiday? No, that is not my concern. Any holiday at all? Equally not my concern. (Ah, sorry, please read that as "vacation" if you prefer.)


I don't really buy it. I was broke before the craziness of the past year, and I'm still broke, but my lifestyle and general expenses haven't changed one bit. Sure, groceries are a little bit more expensive, but that's about it. Nothing really feels different to me other than a bunch of people seem to think that they're suddenly way worse off than they were before and can't shut up about how "tight" things have gotten.

Ah, I think I see that you and I are not so far apart as might have seemed. Yes, your point is quite correct, poor before, and poor now. So I won't be one of those worrying that they might have to "downsize" - well, not in the sense that one reads about - those are people who are so very shocked they might not be so comfortably off, might have to let the nanny go or some such dread horror. But, the thing is, I DO think that the fact that groceries have become more expensive does matter. When one is already buying from the supermarket's "value" range (=cheapest possible) it is a bit tricky to know where to go from there. Oh well, I'll just remind myself of other times (student times) when there was little food. Difference is, that was always temporary and with a light at the end of the tunnel.



Is it just gas? Is this suburban two-car commuting families where mom and dad are paying a ton more just to get around everywhere, because everything is sprawl? I live carless in a city, so I don't really get hit by that. The bus and train are fine for me.

A fair point, and if something will stop those idiots who simply "have" to take their damn 4x4 tank to the supermarket, I'd quite like that.



For the record, I understand that things like retirement and investments may be fluctuating like crazy, but that's not "things getting tighter" or influencing take-home pay or day-to-day lifestyle.

Yep! That is actually, as you said, just "fluctuating like crazy". The usual advice - "remember that the value of your investment can go down as well as up". It may look a bit sad for some folks who thought they had planned enough to be comfortable, but I am more worried about the bottom of the heap. Perhaps the older folks who are now very very seriously worried.

AND, before someone points it out, I do not presume to count myself as the unfortunate bottom of the heap, miserable git though I might be, because I do have my (rented) flat and I am alone with no children to explain to them why they cannot have X or Y for dinner. Nor am I an elderly person who might need more in the way of heat and so on. AND yes, I do have internet, but that is my extravagance, it being as cheap to have internet with the telephone as it is to have only the telephone service. It does instead of daily newspapers and television. SO, just as long as we have got rid of that objection. :)

You know, I am a nasty enough person to wish (almost, and only a tiny bit almost) that I would still be working for one of those shyster stockbrokers in the Square Mile. A bit of schadenfreude for the arrogance they had.

Really, Freejooky, it's gonnae hit you too. A few months later, you might get a bit worried about what you are paying to heat your house*, and what you are paying for your basic foodstuffs.



*Wear a cardigan! I do. Obviously that's always a good look. Although perhaps we call it a Ceredigion nowadays. :D

[Bill Door]

Every quarter I run a calculation of our net worth. Everything from a rough value of our home minus the mortgage to the sum of all of our bank accounts, stocks, and IRA's. No furniture, electronics, autos or jewelry though, I'm not counting up pots and pans.

The last one, done on October 12, showed a $58,843 decrease in my net worth over the last three months. Although I have plenty of money for day to day purchases, that kind of decrease in asset value makes it more difficult to decide to make long term purchases. I have tightened up on purchases as a result.

[ladyfoxfyre]

I definitely feel it. I'm interviewing for second jobs currently just to be able to save money and not spend it all on bills and expenses. My 401k is not tanking terribly, but it's worth about 2/3 of what it should be. Food prices are up, everything is up. The amount of money I make isn't piddly but it's not keeping up. I'm not using as much gas as I was before, and prices have gone down, thankfully. Somehow though, it's all dwindling. So, I have a couple job offers to consider in the next few days. Cross your fingers for me.

[AmericanMaid]

I was laid off last November and went through a series of contract jobs where I had to pay for my own health insurance. So fiscally speaking, I was clobbered 3 ways: commuting costs, commodities costs, and healthcare costs. Even now that I have a job with benefits, my health insurance costs more than what I used to pay at my old job. BTW, my daily commute is less than 30 miles and I drive a Ford Focus. Even with tiny cars, we can feel the hurt gas-wise.

[Morgenstern]

When gas was $4.719 a gallon here (San Diego County) I was noticing more month left at the end of the money. Now that it's back to about $3.53 a gallon, I've noticed the money lasting longer.

[pepperlandgirl]

I don't think the cost of groceries should be dismissed as a small thing. I don't have any kids, so it's just me, my husband, my sister, and two cats. And I am very, very careful about what we buy--searching for things on sale while trying to make things healthy. We're basically getting to the point we're living off of pasta and rice and groundbeef and it's still all I can do to keep our weekly bills under $100. I used to be able to get away with $50/week. When your monthly grocery budget literally doubles, things start to get scary. I can only imagine what a factor of 3 kids must do to people who are trying to budget...

[BlinkingDuck]

The average Joe doesn't feel the hurt in the economy until well into the downturn. If the DOW tanks it can take several months to start to feel it.

However, when the economy gets better, it takes the same amount of time to start feeling the uptrend. So, if the DOW rallies during a recession, it can still take a long time to feel the end of it.

[Quartz]

Unemployment has hit 1.7M over here. I'm eating a £10K pay cut, though the credit crunch isn't entirely to blame for that.

[DianaG]

I have little debt, no investment, little savings, a stable job, and love renting.
That's pretty much me, except I have a kid (and no car), and I'm feeling it. Food is up. Transportation (mass transit and taxis) is up. Home heating costs are WAAAAY up. A few months ago, my monthly gas bill went up 33%. That's based on estimated usage, by the way. God forbid we have an especially cold winter.

[Raza]

My wife's online art business is down 65% from its peak in 2005. It now makes just enough profit to pay the phone and internet bills.

One brother-in-law is ready to walk away (abandon) his $300K investment in a Florida pizza restaurant he owns.

Another brother-in-law has declared bankruptcy, lost his house, and continues to struggle with his small food business.

From the 20 or so people I am close to and know their financial situation: those that have been in the same job for the last 2+ years are getting by; those that own small businesses in virtually every industry are hurting, in some cases catastrophically so. And in none of these cases were there sudden unexpected expenses like medical bills.

[howye]

Absolutely - The high cost of gas and the rise in cost of everything else has hurt my family. It is the small things, like the cost of eating out, even getting pizza, has risen to the point where we just don't do it.

But, the real problem is that a poor economy has led to a lack of hiring. I quit working several years ago and went to law school full time. I have now graduated, but nobody is hiring. Meanwhile, plummeting stock markets are shrinking the nest egg we have been using to supplement my wife's income. We aren't in trouble yet, but those students loans are going to come due soon and then its time to worry.

[XT]

I have to say that actually (my investments aside) the day to day expenses are MUCH less today than a month ago. Gas is way cheaper (about a dollar less a gallon...got it for $2.68 this morning), and groceries and such seem about the same. Since we took a hard line on credit about 2 years ago that has been stable. We bought a house that's way below our current means, and that hasn't changed at all. Same with our cars...we decided to push another year on both of our existing cars and wait until after the first of the year to even look at buying a new (used) car...and I expect that car companies will be competing for our business, so in theory at least we should get a good deal. Our taxes haven't gone up (yet), so that's the same.

As of today things are actually better cost wise than they were for the last 6+ months. Whether it STAYS that way is another matter. But right now? Way better, no tightening at all...yet.

-XT

[Dinsdale]

Every quarter I run a calculation of our net worth. ...

It really conjures up a whole slew of emotions/thoughts to see that despite your efforts to save and conserve you keep becoming worth less and less, doesn't it? Hell, I'd be better off stashing my 401K contributions in a mattress somewhere...

I am fortunate to make a good salary in a secure job, and we have always lived well below our means (at least what most of society would consider our means!)

But next year we will have 3 kids in college, and that is a pricey proposition however you cut it. A good chunk of our savings which were intended to go towards college have decreased substantially over the past 2 weeks/months. No idea how much - if at all - they will rebound before we need to spend them down. So we started tightening our belts to save more month to month than we might have otherwise.

Even our relatively conservative lifestyle had quite a bit of fat to cut. We had discussed possibly replacing one of our cars, but that isn't going to happen any time soon now. And we pretty much tabled all travel plans for the next few years. Told the kids x-mas and b-days would likely be leaner than they may have gotten used to in the past. And I anticipate utility bills being huge thos winter.

And several months back when gas prices spiked we made a concerted effort to drive less. Combining errands, walking and biking whenever possible.

[burundi]

Why? How are things "tighter" for them "because of the economy?"
My husband and I are very lucky/frugal, so we haven't been hit as hard as we could be. We have a fixed-rate mortgage and no debt beyond that. We both drive to work every day, but our cars are paid off. We don't have cell phones or cable. We've been building up our savings. I carpool; we both pack our lunches every day; we don't buy much new stuff.

Although we're not suffering, it feels like we're just treading water instead of making progress. Our dollars don't go as far as they used to. Even though we're making more money than ever before, our lifestyle hasn't materially changed. Gas is more expensive; groceries are more expensive; health insurance premiums keep going up. We're expecting a baby in January, so our insurance premiums will go up even more. The cost for infant day care is staggering, but neither of us can afford to quit our jobs.

It's not that I want to have a lot of stuff. But I would like to make sure we can have a comfortable retirement, send our child to college, have decent insurance, emergency savings and, yeah, have a little extra money for vacations and fun. It seems like those simple goals are getting harder and harder to achieve.

[mack]

I was getting killed by gas prices last spring, but getting laid off relieved me of that problem. :D

[accidentalyuppie]

My very small business will do fine. We don't use a credit line nor do we extend credit. I expect some downturn as the wealthy cut back on toys. But I am always prepared for downturn, I can keep up with expenses on half my current income plus I have a healthy cash reserve.

But I am bummed out and pissed off. I have lost 150K of net worth in a month and that HURTS, no matter if the money only existed on paper.

[Skammer]

One-income household here, with two kids. No debt, except for our mortgage which is fixed at a reasonable rate.

And things are much tighter then they are before. Gas for two cars and food for four people is the biggest chunk of it. We haven't eaten out in about 2 months, and I've started to carpool to work to cut back. Still, we're slowly draining our savings. My wife has taken a part-time, work-from-home job. Another big unexpected hit was that we suddenly had to replace our heating/AC system which we managed to replace for $4000.

We're also a little nervous about my job, my firm is making more cutbacks this week. I'm probably okay, but you never know.

I'm confident we'll be fine -- but there is no question things are a lot harder than a year ago.

edited: I forgot to add my 401k lost 35% of its value since the beginning of the year. Not really a big deal since I probably have 20 years to retirement, but it adds to the stress a little bit.

[burundi]

Out of curiosity, Freejooky, what's your family situation like and what do you do for a living? If you're young and single, I can definitely see how the economy might not affect you as much. But people with children and mortgages tend to have higher expenses and less flexibility, so it's harder for them to adapt to upswings in food, gas, health care and utility prices.

[Kayeby]

My husband's job is secure and pays well. We have no kids. We live below our means. We're young enough that we don't have much in the stock market and can wait for it to recover. Property has fallen from last year but is much higher than when we bought.

We're still tightening our belts. This isn't exactly the sort of economic climate that makes you feel invincible.

[Palo Verde]

I'm a stay-at-home mom to 4 kids. Which mean's my husband's salary has to support all 6 of us, plus the mortgage etc. And today I took my son to the orthodontist for the first time (YOWZA! that's expensive)

But I haven't noticed any huge changes from the economy. I keep waiting for it, but nothing big yet. I mean, food is more expensive, but we don't eat out much. Gas is more, but we live centrally and don't drive much. My husband bikes to work and the kids take the school bus. We can afford our mortgage and the car is paid off.

So I guess we're in pretty good shape. Knock on wood.