The Economy

[Pax]

We don't live extravagantly and we just bought a house that was 1/3 less than we planned (so we can pay it off in eight years). Right now we're in better financial shape than we've ever been...but it took seven years of careful planning to get here.

[Veronica]

I do have to say I am seeing the effects at work. Two of my students this past year talked about having to give away their dogs because they had to move out of their houses.

We are no longer going to have a full time library assistant. We have never had a librarian.

Our night time custodian will only be at our school half of his hours. Our classrooms will only be cleaned once a week now rather than 2 - 3 times.

We lost two teaching positions, one at primary and 1 at intermediate. I am not surprised by the primary one - many of those classes had 15 - 18 students. Twenty is their max. However at intermediate we all had classes of 34. I am looking at 36+ students in my class right now when we start up in late August. We don't have a max. I am sure they are all well mannered children, eager and ready to learn. All of them have mastered the prior grade's curriculum. And all are fluent English speakers. And my test scores will be just fine.

Field trips are becoming impossible to take. You have to pay for the bus, if you can get one, plus the cost of wherever it is you are going. Or you can have parents drive. But they have to have this huge amount of insurance and fill out a gazillion forms all in triplicate. It's such a hassle! Many of them don't have that much insurance. I am getting more and more families telling me that they can't afford to pay for the trips. It makes it hard. You want to give your students some exposure to culture and history, but how do you fund it?

You don't want to know how much of my own money gets spent in my classroom. It is not a trivial amount. I am lucky and so are my students, that we can afford it.

V.

[smilingcat]

We have been getting ready for the market to crash. My one and only active credit card is getting far less usage. My internet account is paid from(through) the credit card and only other charges are for my work which I get reimbursed. I do have a second CC but it gets no usage and stored safely away in a safe deposit box. My retirement account has been all transferred to bond funds and very little in stocks. And my stocks investments have been liquidated and now sitting safely in cash. I'm being a real bear.

No carryover in credit card debt, only debt I have is my mortgage. This will be gone in about 7 years. Also have line of credit, this too will be gone in about 5 years. No car payments.

on conservation side of things:

We are installing a hot water heater (finally) to help with my utility bills. And I would expect it will pay for itself in under 3 years maybe 5.

replaced almost all the lights in the house with CFL's

We've also ripped out the front yard and replanted with vegetables and flowers (so it looks pretty). Have bell (capsicum) peppers, okra, heirloom cucumbers, heirloom tomatoes, string beans, snow peas, chinese long beans, egg plants, zucchini, yellow squash, herbs, different kinds of lettuce... A miniature farm. We are glad we did this cause of the tomato scare with salmonella.

finally getting rid of my land line telephone to save another $25/mo and will be strictly wireless. No cable, no satellite, no TV! My partner and I enjoy not having a TV. We do listen to radio though. Don't even bother with newspaper when I can read things like Der Spiegel, BBC news on the internet. Lets not talk politics okay

and lastly, I'm being a real tightwad. Conserving as much cash as possible. If I could exchange my cash into Euros I would.

smilingcat

[Becky]

We have been getting ready for the market to crash. My one and only active credit card is getting far less usage. My internet account is paid from(through) the credit card and only other charges are for my work which I get reimbursed. I do have a second CC but it gets no usage and stored safely away in a safe deposit box. My retirement account has been all transferred to bond funds and very little in stocks. And my stocks investments have been liquidated and now sitting safely in cash. I'm being a real bear.

Good point about investments. I struggle with the idea of what to do with my retirement accounts. I'm not a super-agressive investor, but I'm easily 25 years from retirement, so a good chunk is in stocks. Do I temporarily move things to more conservative funds, or do I ride this out? I really should call my financial guy ("financial panther" for you Simpsons fans ), but I'm curious what y'all think.

[Blueberry]

Good point about investments. I struggle with the idea of what to do with my retirement accounts. I'm not a super-agressive investor, but I'm easily 25 years from retirement, so a good chunk is in stocks. Do I temporarily move things to more conservative funds, or do I ride this out? I really should call my financial guy ("financial panther" for you Simpsons fans ), but I'm curious what y'all think.

Make sure your portfolio is adequately diversified (international, mix of domestic stocks, appropriate level of bonds) and ride it out. Least that's what my financial guy is telling me

CA

[PrincessAna]

DH and I are doing okay. We already had a fair amount of slack in our budget, so basically we buy less fun stuff to pay the increased prices for gas, food, etc.

I do find the current economic situation frustrating though. DH and I live somewhat conservatively so we can indulge in new toys (We're a couple of tech geeks ), bike stuff for me, sports apparel for him (How many hockey jerseys does one guy need?!?), weekends out of town, and so on. As prices keep rising, our conservative lifestyle is paying off less and becoming more of a necessity. And I don't know if things will every really turn around. The stock market may go up, but are food prices ever really going to return to something more normal? Gas prices didn't after Hurricane Katrina. That's my real worry, that everything that's going on now will just set a new standard for pricing, rather than being a temporary hike.

Anastasia

[smilingcat]

Hi,

I'm not a licensed broker so I can't give you any advice. my ex was a stock broker turned into a bum whole another story... anyway, read as much as you can and play a game in your head of what if games and see how the market will react in your head. And invest/position yourself in a way so that if the market does act the way you think, you will make money. You have to make your money work for you. The same man stressed in "don't trade in small quantities". You have to invest real money to make money. And you will lose real money too. But the game is to make more in the long run.

If you are looking for a long term investment with reasonable return ( I compare it to the interest rates available from the bank) and if the divident paying out is more than 3% today, you are better off with the investment. However, if you think the value of the stock drops you will come up short in the long run.

As for riding it out, I haven't bought into that idea. Why not dump it and wait until it drops then buy it back? then again you have to decide if paying out for the capital gains tax is worth while or not. Generally, if the stock doesn't tank more than 30% its not worth dumping because of the capital gain. If dumping the stock then buying back atleast "30% cheaper of your capital gain" then you are better off riding it out. so lets say you bought the stock at $10.00 and went up to $20.00 then you thought the market is going to tank so you sell. Your capital gain is $10.00 so you have to pay $3.00 in tax. To come out even, the stock must lose $3.00 or go down to less than $17.00 to make it worthwhile to sell, If the stock stays above $17.00, then you are better off holding onto the stock.

Another important concept is don't try to sell at its peak!! I've been told that "pig out and you will get roasted."

just some thoughts.

Smilingcat

[maillotpois]

We saw a pretty substantial drop in income last year (about 1/3) from prior years just due to issues involved with working for/owning small law firms. SO we did some serious belt tightening then. This year looks to be better, but I have a constant gut wrenching stress level about our financial situation and the economy as a whole.

Changes?

I'm working at home more. Driving to the office, with bridge toll, probably costs $15 - 20. So I only go in once a week. I am using the motorcycle more. DH is cycling to work more and more.

No big trips planned for this year (Of course Bend is a HUGE trip. ). But we're not taking any expensive vacations. (We are planning Hawaii in February, though.)

And I want to know who voted "never better" !!!

[indysteel]

I'm "lucky" in that, as part of the federal bankruptcy system, my job is very secure in times of economic trouble. That said, I'm doing what I can do to limit my gas consumption but given that my car is over 7 years old and only has 40,000 miles on it as is, I don't drive much anyway. I've always been a saver, too, so that's not going to change. Boom or bust, I live well under my means, just so that I can one day buy a pair of unnecessary red shoes!

I just read in one of my professional journals of a poll indicating that 85% of us think we're in a recession.

[GLC1968]

To be perfectly honest, we are quite concerned and are making some pretty major changes. The first was a move across the country. The second was buying a house with a little land but keeping the mortgage well below what our salaries say we 'should' be able to afford. We also picked a home that was still bike commutable (barely!) to both of our places of employments. We are growing a lot...veggies, fruit trees (came with the property), herbs, etc. We are having insulation levels checked and solar estimates (both hot water and PV) done. We are selling the second car, selling much of our excess 'stuff' and generally working to downsize and to conserve. We don't use credit cards, we are paying extra on our mortgage (or we will, once we start paying it!) and on the other car, and we are trying to get debt free. We are also building a chicken coop this weekend and getting our own chickens!

Personally, I believe things are going to get much worse before they get better, so we are trying to prepare as best we can.

[Trek420]

I just read in one of my professional journals of a poll indicating that 85% of us think we're in a recession.

You know how to tell the difference between the depression and a recession?

It's a recession when your friend lost their job.
It's the depression when it's your job.

These are tough times. Interesting times as Mr Silver says. And I agree with Geonz and others that now's the time to help others who may have it tougher than you.

[spokewench]

I bought a 50cc scooter to save gas to and from work - and for other small trips;
I drive my other vehicles less; think a lot more before taking a trip and sometimes take the motorcycle instead of car if I can;
I really watch my spending at the grocery store;

We have always watched our money cause both my husband and I are part time. So, we changed our life style a while ago to be able to not work full time; so we have changed a few things and are a little more conscious of how we spend money, but we have been this way before because of our lifestyle. we are just tightening the belt a little more now.

spoke

[Tuckervill]

One thing is for sure, now is the time to BUY and not to sell! Sometimes we're forced to sell when we don't want to, but if you can avoid it, do so.

We've been fortunate enough to have seen this coming from a long way off, five years ago we relocate to a cheaper area, with a better paying job. We cut our fixed expenses (mortgage, debt, cars) to one salary's worth, and that salary being pretty low for our prior lives. When the bonuses and profit share come around, we're usually pretty set (although I do have a car payment now because of my wreck in 06.)

We stopped going to town so much, and when we do, we bite the bullet and try to get it all done in one trip. This sometimes is annoying because the boy does not want to wait for me at the hair salon. But, if he wants to go to the mall on this trip, we'll have to compromise.

I ride my bike for errands and such. I've noticed I'm not the only one. We bought a Civic for the boy from one of our other boys, but he's not legal for another year and a half, so we drive it as much as possible.

Here's a sign of the times. Youngest boy bought a scooter for himself. It broke, under warranty, so we took it to the shop. It's been there for THREE weeks, because the shop is so snowed under, just SELLING scooters.

Karen

[sundial]

We try to be good stewards of what we have. We are making fewer trips to town in the car, hubby bought a motorcycle to ride to work, we're not going to the movies as often (which the drive is 100 miles round trip), I've started cooking from scratch again, and we're riding our bikes more often--which serves as both exercise and entertainment.

[Melalvai]

Like Geonz, never been better, but that is because of personal lifestyle changes recently unrelated to the economy. We realized a) we don't need a new car (nor do we need to sell our existing car) and b) that credit cards are the biggest ripoff in the world.