How bad is it to suffer a financial disaster?

In My Humble Opinion
1

My family and the people closest to us are getting by pretty well since the economic downturn started. The only people I know who are out of work haven’t been hit too badly yet. No foreclosures, no one has had to leave his/her home. And when I ask how they are doing they always say they are fine, not too worried, plenty of things to keep them busy. I don’t really believe them.

I keep reading these horror stories about people going through their retirement savings, out of work for over a year and counting, people in their 50s who will never get a good job again, people losing their homes. I haven’t read of anyone ending up in a homeless shelter yet, but I have a feeling that those stories are not too far off. Or maybe they are already out there and I’m not running across them.

So, how bad is it? What is it like to have to give up your home? To be out of work with no hope of getting anything decent? To run through your savings? I’m guessing that it is awful beyond belief, but then sometimes I think that people are very adaptable and maybe after a few weeks people adjust and find ways to get by.

2

I declared bankruptcy in March, completed it in June.

Been in an apartment anyway since my Divorce. Had a house before that, sold it to move into her house, then of course, Divorce came knocking and ended all that.

I was unemployed for 9 months in 2008 and wasn’t doing very well financially before that.

I’m 48 and I have no retirement savings, no property, no great job to make it up with. Given the current economy, it’s unlikely that I will have a decent paying job within the next couple of years. I won’t say ‘ever’, because I’ve been around long enough to go through a number of economic booms and busts. It is entirely possible that, five years from now, we’ll be back to near full employment and I’ll get a better paying job. Of course, it’s entirely possible that won’t happen and I’ll end up flipping burgers at McDonalds at age 75 to supplement my meager Social Security, assuming that it still exists.

The worst part of declaring bankruptcy was all the stress leading up to it. Once it was underway and I’d gotten all the paperwork done, it was cake. The only problem/annoyance I have now is that I don’t have a bank account and no bank will give me one for one year from the date my bankruptcy was final.

I know a number of other people in similar situations, both younger and older. My company is and has been full of them (when I showed up for training on the first day and looked at the other 29 people in the room, my first thought was “Yes, the economy sucks” - because in better times, at least half the room would be making twice that money and never considering that job.) I used to work with a guy with a wife and four kids who lost his higher paying job and eventually, his house. Ended up moving into his mother-in-law’s house.

3

I’m hanging on to my house only through the help of my family. I’ve not had a proper job this year. :eek:

I’ve no savings left.

I reckon it’s going to be 2012 before things get better here.

4

It hasn’t been very much fun at all, but I don’t have time to describe it now. Will try later.

5

OK well, we haven’t hit utter disaster–we still have our house and stuff. We spent most of 2009 without any income whatsoever. That was no fun.

Luckily we have a small mortgage (for CA) and though we got behind and probably came this close to losing the house, we were able to negotiate some patience. Then when we got an income again, we paid every two weeks until we were back up to speed. Since our mortgage payment is lower than current rent prices, and it’s impossible to sell now anyway, there was nothing we could do except try our best to hang on to the house. I tell you, I am so grateful for that small mortgage.

We had help from our church for food, and I learned to cook with what I got instead of what I wanted. (It’s like a little grocery store, but the selection is of course limited. There was much more meat than I was used to, and only certain fruits and veg. The jam and salsa is to die for.)

We borrowed a lot from my parents and ran up the credit cards to pay our bills. Of course we got rid of Netflix and other luxuries, and we didn’t run the AC in the summer. We had to have cell phones for job searching, but moved to the most basic model with pre-paid minutes. And so on.

It was really, really stressful. We would be hopeful about job X, and then down again. It took me months for it to really sink in that there were no guarantees–we could lose the house, we could end up in my parents’ basement, whatever. You know, you always have this feeling that nothing that bad could really happen. My friends were so nice and concerned but after a while I hated them to ask me how things were going, because if I wasn’t feeling pretty happy I could tear up unexpectedly, which I hate.

Then my husband got a job again, yay! And we started paying everything back. Everything was going pretty good. This summer a really amazing job dropped into my lap from the sky, and I was going to use the income to pay stuff off faster. There was a good light at the end of the debt tunnel after a year of diligent paying-off.

Yeah, the light was an oncoming train. Husband was laid off last month (good work, times are tough, see ya). In some ways we are better placed, in others worse. Pros: I have a well-paying job (for 9 hrs/week) and he gets unemployment, which will let us keep up with the basics. We have income, just not as much. Cons: savings are close to nil, we still have a bunch of CC debt, so not a lot of wiggle room there (the banks, getting antsy, reduce the credit limit every time we get the debt lower). My parents are stretched right now. So we don’t have the cushion we had before, but we do have steady inflow.

Job prospects are looking pretty good ATM, so we’re not in despair or anything. I am really grateful for my job and the unemployment. But dude, this sucks.

6

I’ve been completely ruined by this “Great Recession”

I’ve had almost three years of minimum wage jobs. I mean I never worked for minimum wage. I was making more money in 1991 than now. And on top of that, I haven’t worked 40 hours a week in all this past year. The hours keep getting slashed or you get sent home early.

The hardest part for me at 46 is knowing, I never will be where I once was. It’ll take me at least five years to get back to where I was two years ago. And that doesn’t include the savings I did for my old age, which I never will get back.

I don’t have enough time to re-earn the money. And even if I get a job it’s going to be a fraction of what I was making.

It’s kind of depressing to know the best hope you’ll have is to die before 65 so you won’t have to worry about your old age, but what can you do?

The worst thing for me is how much wages have fallen in my industry. I go on interviews that are paying HALF for jobs I did in 2003.

7

It helps to realize that there are a lot worse things going on in the world.

Try not making the same mistakes again.

Like George W Bush said: Fool me once… shame on me…(something like that)

8

We’re living off my wife’s pension (she is one of the lucky ones who still had a full pension when she was pushed out of her job) so we’re not destitute. Mostly it’s kind of a waiting game.

How long can I put off the home or car repair?

How long can we avoid tapping into our 401K’s?

How long will our retirement funds last once we do tap into them?

9

Thanks for the responses to the OP. This is a horrible story.

I just saw a segment on 60 Minutes on this topic focusing on Silicon Valley. Lots of middle aged and older people who have lost their jobs and used up their savings. It’s mind boggling. I guess for my whole life it’s been pretty common knowledge that you could wait it out and find a good job again when things got better. Not this time. And it seems like it’s going to get a lot worse for a lot of people.

10

Strange times we’re in. In today’s San Jose Mercury News, the front page has an article about how there is still huge demand in the Silicon Valley for engineers with certain key skills. Top companies, such as Google, Facebook, Twitter, and LinkedIn, are fighting for those few people.

“In the midst of a jobs crunch that has thousands of people out of work in Silicon Valley, there’s a hiring frenzy going on among startups, social networking companies and some of the valley’s tech giants.”

. . .

“Valley companies are looking for Java programmers, network engineers, network security analysts, cloud computing specialists, virtualization programmers, user interface engineers and mobile technology specialists, Silver said. The average salary for these jobs in the valley is $96,299.”

For everyone else, the employment picture here remains bleak.