Anyone NOT Worried About the Upcoming "Crisis"?

[crisi]

Our political class has chosen not to drill for oil in this country, where we have vast reserves, making us dependent on foreign oil.

They also haven't funded much research into alternative energy. But we can't just blame them. We spent 15 years with a society that played the "my SUV is bigger than yours" game and saying "why shouldn't I heat a 2000 square foot home for two people with 17 foot ceilings." Our government has subsidized entire industries based on petrochemicals, while its pooh-poohed funding for sustainable tech. It isn't like we haven't seen this coming since the Carter administration (and before that). We choose to ignore it - politically and culturally - unless it actually hurts.

 

[crisi]

It concerns me in looking at it from a "larger picture" perspective. I have plenty of room in my monthly budget for the rise in energy and gas prices, but a great many Americans do not. Many Americans are in debt to begin with and so they're not in a position to handle a 20% rise in gas prices and up to a 10% rise in food prices. We have a negative national savings rate....nothing in the bank for a rainy day. This wasn't the case in the 70s, 80s and 90s....Americans had a "rainy day fund" back then.

I really worry about it from a macro level. We have enough cash to pay $10-$15 a gallon gas and $12 a gallon for milk - it will hurt, but we can do it (and some economists are throwing around those prices BY THE END OF THE DECADE - I don't believe them, but they are the economists). But at a macro level, that's going to plunge this country into huge problems, and I really don't want to live in a society where the have nots are starving - because people will steal and murder and revolt to feed themselves and their children.

The Romans governed on the premise of "bread and circuses" - if people had enough to eat and were entertained - then the ruling class could do what they wanted. We've got entertainment down pat, but if the bread falls apart, we are in deep doo doo.

 

[Bete]

We are on a fixed income. I've experienced some unexpected events over the last 1-1/2 years that hurt us finacially. Luckily, I had a mother (86 years old) that helped us out. She lives with us. So, we are feeling it some. This was the first time we ever asked for help financially from anyone. The unexpected bills were an exception to the rule; so, normally we are just fine. We didn't feel comfortable taking it out of our savings; because, we live off the interest income on those savings. If we take the principal, we have less to live on; so, we want to keep that intact, as long as, possible. We are ok normally, if there are no suprises and if we follow certain practices which are listed below. We've been retired for about 7 years now. I thought sharing these ideas might help some people.

We have learned to cutback. This means going to places like Aldi's (very basic foods offered for less) for groceries. I still shop at the regular chains too, but I'm careful and do sale items only there. Generic products have become my best friend. I use coupons which by the way is on the rise in use, now. I use the coupons in stores that honor double coupon value. Also, it means growing some of our own produce from seed in our backyard, too. We buy 95% of our groceries on sale. I refuse to pay regular price. We will go without if I don't get a sale price.

It also means eating less meat and other high priced items. We stretch our foods with potato, etc. Pasta is big in our household, as well as, beans. We do a lot of homemade soup. If we go out, we do lunch and buffets. We look for coupons to go out dining, too. If we go to a movie which is not often, we do a matinee for cheaper prices. Our frugal practices allow us to do some activities that are fun; although, we are careful about extras. If we still worked I would be doing home made coffee, not going to Starbucks, etc.

I've learned to use internet for some shopping and get good deals that way by using coupon codes and free shipping based on the amount of the order. We consolidate trips into town. We make a day of it and then stay put at home for the rest of the week; so, we conserve gas. If we have doctor appointments, we combine that with these other activities like grocery shopping, etc on the same day.

We don't have every TV channel available on cable, etc. We use a cheapy cell phone service which is the pay as you go kind. We use the library a lot for book reading and getting music CDs and even movies.

We have always lived under our means. We will buy veneer furniture; I don't need 100% wood. I don't need a granite kitchen counter. We don't abuse our utilities. We will wear warmer clothes in winter and turn the temperature down on the thermostat. We don't buy a new car every three years or for that matter every five years. We do our own DIY fix it jobs around the house, as much as, possible.

We will travel on vacation during non peak times which is always cheaper. Did I say vacation? Yes I did! All of these frugal practices above allow us to go to Disney World every year. Of course, we stay at POP or All-Star resorts. We've been for the free dining promo three times, now. All of the practices above allow us this luxury called a vacation. If we had to though I would skip a vacation which is our one special treat for being so Scroogy all year long.

You make choices and this is how we get a vacation out of it. But these practices can help any household to save money. I feel fortunate we all can eat each day, we have a roof over our head, etc.

 

[MattM]

I don't really understand this idea that it's the news' fault and everything is really just fine. When I go to the store and milk is $4.29 a gallon where it was $3.59 a gallon a few weeks ago, that's not a Jedi mind trick perpetrated by the liberals at MSNBC, that's reality.

I'm not saying that its the media's fault that the economy is in a slow down. Im making the point that the media tends to focus soley on bad news.

Did you hear on the news that personal income is up, or that real GDP has increased, or that the international trade deficit decreased by $3 billion from last month? (granted its still negative, but that's still positive news).

Good news doesnt sell. Plain and simple.

 

[Solomonsmom81]

I just want to say it must be really really nice NOT to have to worry about the economy, gas prices, or grocery bills, pay for rent and bills, and have money to sit at home and plan for a nice WDW trip, I havent been to WDW since I was 10 and mom and dad paid for that trip. I come on this board for the freebies and help with my budget, and I dont plan on going to WDW for a very long time ( maybe never at this piont). I also don't have to watch the news to feel it, my DH just got his hours cut and we are taking a $200 month loss, and his company is about to be sold to their competitor because of the economy so he might not even have a job soon ( we are praying constantly about this) and he drives 45 min to work in Michigan and he can't just jump up and find another job because there aren't any here, I am currently going to school full time for nursing so I can get back to work to better our income. We have one car so I can't work while he does plus we have 2 kids so then that would be daycare we would have to pay for and well I would be working to pay for the gas to get to work and for the daycare... SO those of you that are truly BLESSED and don't or choose not to worry about what is going on in this country, remember there are those that are very worried and are hurting, and say a little prayer as you lay down without a worry of money or how to pay for your next trip, and be greatful that your only worry is that a silly little ride wont be working as you visit somewhere that only so many wish they could even dream of going... Along with the others we dont have a fancy car, we have a cell phone that my DH got from his work and they are taking that away any day now, im on dial up so I can do online classes for school , no cable tv, and don't do anything that cost money except buy food and go to work and school. So I'm wondering how do I cut things out when there's nothing left to cut out and start budgeting around the economy???

 

[gina2000]

I see a continuous decline in the American middle class life style. More and more people are falling out of the middle class into the lower class due to lower salaries, increased health care costs, and higher day-to-day living expenses.

It's a vicious cycle. The less we buy, the less we can work, and the less we work the less disposible income we have.

I believe the economy will contract due to higher energy costs that will trickle down through all aspects of society. Jobs will be lost and lifestyles will change dramatically.

It's not the end of the world but I do believe it's a difficult time for the US economy and the US consumer. If people had been saving, it would be less difficult. Unfortunately, that hasn't been the case and it will fuel the downtrend even further.

 

[kismet1003]

Not trying to interject politics in here, but…remember that we're getting our "news" about the economy from a national media of whom the vast majority are actively campaigning for a certain presidential candidate. Their objective is to paint an entirely bleak picture to pave the way for their candidate to win. Moreover, the vast majority of "reporters" know as much about economics as they do about astrophysics. Consumer prices are rising because the cost of oil is rising, due to a huge increase in demand, mostly from China. Since everything we buy is trucked around the country, those fuel costs increase the costs of goods. Our political class has chosen not to drill for oil in this country, where we have vast reserves, making us dependent on foreign oil.

Couldn't agree more with you !!

 

[CarolA]

It's not the end of the world but I do believe it's a difficult time for the US economy and the US consumer. If people had been saving, it would be less difficult. Unfortunately, that hasn't been the case and it will fuel the downtrend even further.

You know I was wondering about this statement.... I keep coming back to one thought.

If you have to spend your savings to continue your lifestyle then all you are really doing is delaying the change.

Now don't get me wrong I am not against saving!!!!!! I think everyone should have emergency funds and retirement funds saved and a lot more then most of us do. (I do a decent job but I could always do better!)

I am not sure how much "saving" would help avoid the downturn you speak about however. I am sure that not "overspending" in the past would have helped. When you look at the US debt ratio, the mortgages people have etc, it is scary!

 

[budbeerlady]

I am so sick of it! The first 5-10 min of the local and then national news is gas and or food prices. Thanks, I know already, you dont need to tell me again what the cost is per gallon.

I am just sick of it, I drive 70 miles a day at a minimum to work and back, plus school for DD. There is no good way around it, I have to suck it up and deal with it. But I am sick of hearing it all the time. Our life goes on as normal, I just have less play money and Dh is still not working full time. We can live on what I make, it just doesnt put much into savings or leave room to eat out.

 

[callaghan0416]

The "easy-credit, no money down, live for today" party is over. And now it is time to cleanup. Nobody ever wants to clean up after a party, but it must be done.
Now, people have to learn to cut back and save more. Oh yeah, and here is the biggie, LIVE BELOW YOUR MEANS!

callie

 

[sunnyday123]

Roomy budget? Our budget is so tight that it squeaks!

LOL!!! MY budget not only squeaks, it has to walk uphill in the snow!!!

 

[marcyinPA]

My goodness...everywhere I turn, there's horror stories about how the economy is going to collapse and America is going to shambles because of gas and food prices. Please tell me I'm not the only person that is not falling apart worrying about it! I'm not happy about it - but you work your budget around these things and go on with your life. I have more important things to worry about like why Pirates of the Caribbean is going to be closed when we go to DisneyWorld in less than two weeks and why my 12 year old daughter refuses to bathe.

Life goes in cycles - economy gets better, economy gets worse...prices go up, prices go down...and life goes on.

You' never know that the economy is bad from my experiences this weekend! I was at the mall , and it was MOBBED. People were spending money left and right. Restaurants were full. People were walking around with their Starbuck's and high-end store bags.

Prices are high, but I don't see people putting their wallets away.

 

[dawnball]

You know I was wondering about this statement.... I keep coming back to one thought.

If you have to spend your savings to continue your lifestyle then all you are really doing is delaying the change.

I am not sure how much "saving" would help avoid the downturn you speak about however. I am sure that not "overspending" in the past would have helped. When you look at the US debt ratio, the mortgages people have etc, it is scary!

That's easy - savings gives you 2 things.

1) Rising prices or lowered income have a less immediate effect - you have a buffer (whatever amount you were adding to your savings). The buffer gives you some mental space to analyze the situation without having to panic about how you're putting food on the table this week or getting enough gas in your car to get to work.

2) Lots of solutions to financial crunches are long term. People with savings can spend some of that money to save long term. It might cost $3K to blow extra insulation into your walls. It makes sense to pull that from savings with a several-year break-even. It would make less sense to put it on a credit card or a heloc. People might go back to school for retraining/advanced degrees, or buy a more fuel efficient car. Or put their house up for sale and buy something smaller/closer/lower energy bills/etc.

You want to spend savings to temporarily bridge financial problems as you move toward a long term solution, not spend savings so that you can continue the same pattern.

 

[granmanh603]

You' never know that the economy is bad from my experiences this weekend! I was at the mall , and it was MOBBED. People were spending money left and right. Restaurants were full. People were walking around with their Starbuck's and high-end store bags.

Prices are high, but I don't see people putting their wallets away.[/QUOTE
I agree...I was shocked this weekend how busy the stores and restaurants were here in NE....makes you kinda wonder who is pushing this doom and gloom??????

 

[mpls_mm]

I think many people have hit the nail on the head. If you are socking away 10% and barely getting by and everything else in your situation stays the same and inflation gradually creeps up at a rate of 3-5%, your savings will be eaten up in no time and you will remain paycheck to paycheck. I think you have to look at the bigger picture. I think you have to create opportunities and your own destiny. In every period of time, an economic downturn spurs more creative thinking and more small businesses to open up and more enterprises are started. We really are the only people limiting ourselves. You decide what you get paid and how far you need to drive to get to work. There is always a better way, you just have to really find it.

 

[sarahlovesmickey]

We are not really all that worried either. I mean, yes, it sucks paying the higher prices, but we just do it because we need gas and we need food. It really just means less spending money. We are still saving for retirement and things like that. We have become more frugal. I have always been a fellow couponer and we shop clearance racks for our children's name brand clothing (yes, we buy name brand because it washes better and holds up much longer).

I have to say that a lot of people have gotten themselves into financial messes: buying cars and houses that they can't afford, buying all the latest technological gadgets because they "just can't live without it". I have friends who make the stupidest financial decisions and then whine about how money is so tight and this and that. They get zero sympathy from me. sorry.

Also, I have to remark that this weekend we went up North to a little amusement park and it was jam packed. So gas prices weren't affecting that little notch of the planet.

 

[MattM]

I see a continuous decline in the American middle class life style. More and more people are falling out of the middle class into the lower class due to lower salaries, increased health care costs, and higher day-to-day living expenses.

It's a vicious cycle. The less we buy, the less we can work, and the less we work the less disposible income we have.

What if we could change peoples way of thinking from your above post? People want it all, and they want it now, regardless if the can afford it. We can change it a couple of ways.

The more we work, the more disposable income we have, and the more we can buy (or save).

or

The more we work, and the less we buy, the more disposable income we have!

Money matters are 80% behavior and 20% knowledge.

 

[Missy1961]

You' never know that the economy is bad from my experiences this weekend! I was at the mall , and it was MOBBED. People were spending money left and right. Restaurants were full. People were walking around with their Starbuck's and high-end store bags.

Prices are high, but I don't see people putting their wallets away.

It was the opposite for me in NY--the mall was empty, especially the food court, which always used to be mobbed.

 

[las3888]

I personally don't believe the middle class is falling into a lower class. I saw a study recently about how 'low class' people are doing way better than ever before. They have a lot more money, cars, tv's, etc. than the 'low class' from previous years. I am not good with citing studies and passing it along verbatim, so forgive me for not being more specific.

I grew up in a middle class home. We had one tv. We had 2 cars, but we did not buy new, and we kept them for a long long time. We lived in a very very small house, which was really common, but compared to today's middle class 'standard' home, you would think it was miniscule.

Another point is, think about how long Europeans have paid super high prices for gasoline for so long. They have weathered it. Civilization didn't collapse.

One more point...maybe we would have a little more money in our pockets, if the government wasn't going to bail out all those who have purchased homes beyond their means with this whole foreclosure bail-out govt. program.

One other thing...maybe it's different at your local stores, but I don't get this high cost of food thing. I have been paying about the same for groceries. I got milk for $1.99 the other day on special. I buy most of my items on special, but I always have...I am spending about the same. I can't think of one thing that costs a lot more than it used to...or that a special can't be found for it (and I don't mean running from store to store for specials either). I am actually really excited lately because the produce is in season and I am getting such a deal on strawberries, other berries, corn, etc.

 

[gina2000]

What if we could change peoples way of thinking from your above post? People want it all, and they want it now, regardless if the can afford it. We can change it a couple of ways.

The more we work, the more disposable income we have, and the more we can buy (or save).

or

The more we work, and the less we buy, the more disposable income we have!

Money matters are 80% behavior and 20% knowledge.

Most definitely.

We have become a nation of impulse buyers, owners, and wanters. Had we curbed our impulses and saved a bit, made rational decisions to own things when we could afford them rather than when we wanted them, we'd all be in better shape financially and not too far away from living the same life styles. Delaying gratification is not a bad thing. Buy a plasma once the prices have come down, not the day they come out. Don't buy the latest and greatest cell phone; opt for the next to the top of the line product. It's just all in planning and spending some of what you have rather than spending your expectations.

As far as living off of savings, it's better to have some savings to live off of rather than going into foreclosure or bankruptcy within months of a change in the economy.

I absolutely don't think civilization as we know it is coming to an end. Not even close but our life style will change as a result of higher energy costs.

Europeans have weathered the gas crisis storm but by living vastly different life styles than US citizens currently maintain. Ask a European how many air conditioners/tv sets he/she owns. As a European how large his/her car is and what sort of gas mileage it gets. Ask a European how large his/her wardrobe is. Ask a European how many square feet his/her home is. You will find a vastly simpler life style than we currently maintain.