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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
