It's the economy, smarties

Good news--but I can't share with the internets until the real-life players know. Maybe next week, so stay tuned.

As you all know, I live in NYC, where there's a whole lotta finance going on. And all the recent economic things are freaking people out here. I kind of don't know what to think. I don't anticipate that my kids and I will be out on the street, and I'm fairly certain that the economy will eventually recover.

But I know a lot of people are really worried about things. I thought maybe here would be a place where people could talk about it in a safe way, where we could share the "trivial" worries we have. If there are any economy wonk parents here maybe you could give us your predictions. I'd also be interested to hear from people who are not in the US about what's happening where you live. (And I know so many of us are waiting to see how things turn out with the US elections, but I'm hoping we can stay meta with any political analysis and not get too invested in ways that could be hurtful to others.)

I'll start with the first question: I was thinking now might be a good time to call my credit card company and ask them to lower my balance. (I'm a single mom stuck in a too-expensive apartment and a not-high-paying job--of course I carry a balance.) Do you think they'll be more willing to go lower right now?

Comments

[anotheranon]

Oh - and I feel exactly like Sky - that it my job as the SAHM to look for every reasonable way to save money. We've been in a financial position for a while where that wasn't really necessary, and I am a little ashamed when I read about the struggles of others, and how close to the edge they have to live. But our cash is much tighter now, and I have left my easy spending ways behind.

More shopping at the 'cheap' grocery. More careful meal planning. More Costco. More farmer's market. More making food in batches and freezing (taking advantage of sales & bulk discounts). Using coupons. Less driving. Checking books out from the library instead of buying. No more Starbucks. Getting rid of satellite TV and radio. Instead of buying 6-8 new wardrobe items for this fall/winter, bought 2, to 'freshen up' the stuff I have from previous years. Etc, etc.

[michaela]

I'm glad I'm not the only one feeling a disconnect between the news and my own personal circumstances. I am a full-time freelance writer (ironically, writing for many brokerage firms and investor-related publications), which has actually turned out to be a somewhat recession-proof industry. That's largely because the source of my paychecks is as diversified as are my investments -- I work for lots of companies, therefore I'm less at risk if one of them goes down. I also am paid on a big-city scale while living in a part of the country that does not have a big-city cost of living.

My husband is a high school teacher working with at-risk teens; the program in which he works solves a lot of problems for high-level administrators in the district, so it seems a relatively stable position.

And, yes, I consider myself lucky to be choosing whether to put some extra money toward our home equity loan or toward savings. And I have taken every assignment I've been offered lately - to the detriment of my sanity - just because it makes me feel a little less angsty.

As for my parents... they were pretty far from their retirement goals before this all happened. So perhaps callously, I'm not that concerned.... yet.

I am really glad for the reminder about food banks. I'm going to add that to the agenda for our household mtg tonight.

[Sherry]

As long as I don't look at my 401k statements, I don't worry too much. We've always lived frugally, so that helps.

[Charisse]

Yeaaah...I'm ok at the moment but worried. Retirement savings took a pretty big hit but I'm 25-30 years out. We live within our means, barely--we used to live well under them, but intentionally reduced our income by about 75k over the last 3 years to get us into jobs where we're happier and don't have horrible commutes. We'll be postponing some house remodeling plans and tightening our belts a bit. Both of our jobs are reasonably stable, though they are small companies and could be hit by downstream effects. Mortgage has a low rate, fixed until Spring of 2014. Our flat is in central San Francisco which will no doubt take a hit but which tends to rebound more quickly than surrounding areas. Fingers crossed.

I had a chat with my mom last night--they are nearly at retirement (5-7 years) and decided to get out of stocks entirely. They have a university plan that offers a guaranteed 5% growth rate and had already allocated a big chunk into that. Their house has only 1/8 of its current equity mortgaged, and the payments are easy. They should be OK. We're all worried about my sister who has a crummy warehouse job that is very vulnerable, and not much savings. I think her debt profile is OK right now but she's been known to run her cards up. We may need to help her out, and we'll see what's up with my inlaws.

[Anonymous Today]

I feel lucky with our situation right now. My husband is a consultant, specializing in IT security. Consulting can be looked at two ways in a down economy: it's either one of the first things big companies cut or it's one the things big companies keep, because they don't have to pay consultants' benefits.

I am a SAHM and we live very comfortably on one income (with a big boost from an online side business). We just completed a major remodel on our house this summer, but it will be paid off in two months. Other than the remodel, we don't carry any debt (besides mortgage). We have savings, we go on vacations, we eat out, we buy stuff we want but don't need. I realize it makes me sound spoiled to say all those things, but I also know that if my husband lost his job, we would lose all of those things in a second.

The people I am worried about are my parents. They are retired and my dad lost more than $150,000 in the last year in the market. This is money they will live on for the rest of their lives, so they need it to come back. He is sick with worry over it, but their advisor keeps telling them they can't pull out now or they will never make it back. Tough situation.

[sheSaid]

I am worried and I am not at the same time.
We could loose our house, finances could go caput. But we have family we could live with if we needed. Our family loves us, we love each other, and we will do what we can to get through.
Ok but really loose what we have paid on our house? Loose the money we put down? OMG! and we have debt. We lived too optimistically. We thought we could do more than we could, we kept thinking things would get better. Well the bottom fell out on that. We came to that realization in May and have been working to remedy it. It will take time.

I am worried about work. My DH's job is great secure wonderful. But we live in michigan so I get johanna's thoughts on that!!

I do freelance work. It ebs and flows and is not steady enough, and not quite enough over all. But I am in a pinch. The only thing to keep doing, is keep doing, keep trying, and TRYING to be frugal. That is so hard for us, If I do buy clothes they are used or from somewhere cheap, but none of my prepreg clothes fit! We buy organic and free range, I know it is best for our bodies and health long term (my son's too) but that is very hard. It's too late in the year to start a veg garden, but we might next year.

What I want to know is what might the bottom of all of this look like? All big 3 going under? Will we all end up living communally to share food and heat because there is just not enough to go around?

[Cloud]

I was thinking some more about the people I really worry about- the people I don't know personally, but who are just barely getting by, paycheck to paycheck. I remembered a charity I came across last year, that specializes in small gifts to help people on the edge- the people who were making it until some small piece of bad luck threw their carefully balanced finances out of whack. The charity is called ModestNeeds: http://www.modestneeds.org/. Check it out if you're feeling OK personally, but want to do something to help those who aren't.

[Aisha]

Here in Pakistan, everyone is freaking out. There are rumours about bank accounts getting frozen, safety deposit vaults being sealed, etc. Inflation is getting out of hand. Not all of this is directly connected to America's economic woes, but it is certainly exacerbated by it. Whole wheat flour and lentils, which used to be the standard idiom for a poor man's meal, is starting to pinch the wallets of what used to be the upper middle class. Of course, here, all of this is combined with a great deal of political uncertainty, and a base level of fear for one's physical safety. I used to laugh when my American friends worried about whether I was safe. I'm not laughing anymore...

[Jennifer]

Whew, this hits close to home. Right now, I do ok as a web developer in the Bay Area. I have no debt, rent a cheap apartment and go to grad school. My 401k has taken a huge hit but at least I have more shares even if the value isn't where it was. I have another 25+ years to work so that should correct itself by then.

I'm concerned for my parents who are retired. They live in a small town in AZ and are very frugal. I won't be buying a house anytime soon which was my plan. Now, I'm working on saving as much as I can. Next summer, I hope to be a choice mother so we'll see what the economy does to that plan!

Definitely time to donate to food banks and to tighten the belt.

[Julesag]

We're fine right now and are concerned about our retirment like most folks, but not freaking out. We had a huge wake-up call with our finances when I went back to work after staying home with Junior for his first 3 months, taking a 25% paycut to change jobs and go to non-profit. Prior to the kid, we generally lived below our means, but when I wanted to scratch that shopping itch, I could without ramifications or justification. With less money coming in and the significant added expense that usually comes with a child (daycare, formula, diapers, doc visits for the kid and me) it took us about 8 months to get our feet back under us. Now, we are in a good place, with a low mortgage payment for the area (with a fixed rate), one car payment (with the end in sight) and no CC debt. But, we talk about money every day. We worry about friends and family, especially my MIL who is on a very fixed income. We also had a gas crisis here in ATL for about a month, which taught us that we can live with one car and make adjustments as we need to. We're both as secure as we can be with our jobs, but no one is invinceable. We just manange, and are tightening our belts even more.

[shirky]

i went to buy rice and it costs FORTY DOLLARS A BAG. damn!

[ada]

I'm worried about my parents. I'm worried what will happen if I lose my job (which isn't likely but I still worry). Its made us change how we spend money.

Its also made me more sympathetic to people in dire straits based on a couple of poor finacial decisions. I'm lucky that I'm able to weather some bad decisions from my past. That I have support from family & friends if I ever really needed it. Not everyone is so lucky.

There but for the grace of God go I.

[SarcastiCarrie]

shirky - how much rice are you buying? I'm guessing 50 or 55 pounds?

Kroger brand white rice in the midwest sells for $.75 for a one-pound bag. I'm guessing you're buying higher-quality rice than I am and getting a Buy-in-Bulk-And-Save discount.

[hydrogeek]

Spurred on by this post, I just started a budget sheet to track my spending. For my family of 3 (and one due any day) I spent $300 last month on groceries! Even more surprising, I spent $500 at W@lMart and S@ms last month! Of course, that includes diapers/pharmacy/personal care/hygiene and paper goods, but still, I had no idea I was spending that much. Anybody have any good ideas for ways/things/websites to help to cut back on those necessary but possibly able to "trim" expenditures?

[wendy]

"Here in Pakistan..." I love this site. A true international community. We are not too worried, but we made some pretty dramatic moves in the last few months. We packed up and moved to a much less expensive state. I took a part-time job at a university so at least we have great benefits. My husband started traveling for work again. So, we're working hard not to worry, but it's hard.

[SarcastiCarrie]

hydrogeek - Switch to generic diapers (or I'm sure a million people will tell you to try cloth). I found generic diapers to work absolutely delightfully for daytime (nighttime, notsomuch). I use Baby Basics brand from Jewel/Albertson's. Consumer Reports rated them highly.

For personal care, W*Mart store brand Equate for OTC drugs is cheap ($4 or less for any OTC store-brand drug including prenatal vitamins).

I use store-brand shampoo (Target brand usually). Actually, 5 out of 7 days, I use 2-in-1 shampoo plus conditioner, which is cheaper than using two things.

Paper goods - I do not scrimp on toilet paper. I have standards! I also don't scrimp on tissues. When giant boxes of Puffs or Kleenex go on sale for 3 for $5, I buy a bunch (maybe 12), and I use a coupon. Target brand tissues are OK in a pinch. We use Charmin or Cottonelle toilet paper...wait for the sale and buy two giant packs and use coupons. My rule of thumb is that a single roll of toilet paper should cost no more than $.25 (so $1 for a 4-pack), and a double roll no more than $.50.

As for paper towels, I could not care less what brand. I've switched a lot of that to having a drawer full of washcloths from the dollar store (12 for $1) and use them. The washcloths are great for doing hands and face on kiddo after dinner. And after they clean the kiddo, they get a good rinse and do the floor under his chair, then into the wash.

[sudru]

Hey, I think they should lower your cc balance and our mortgages and school loans, the fat cats were just bailed out, I'm tired of having to pull myself up by my bootstaps while these CEOs earn unimaginable amounts of money at our expense.

[Tzipporah]

I think in the long run we'll all be fine.

The hardest hit are those who took a gamble on insecure debts, or those whose investment agents did it for them. If you're living off interest income right now, it's a hard place to be.

But in the meantime, as a relatively young person (30's) looking to buy a first home, I'm gleefully watching the housing bubble burst and the interest rates drop.

[toomuchstrong]

hydrogeek-not sure where you live but your spending is really not outrageous. we are in a major metropolitan (read:expensive) area and we spend at least $800/month on groceries including diapers and all household products. and there are only 3 of us (1 kid). and i only buy store-brand diapers! and i use coupons. and i look for sale on everything (but i do indulge in a few organic food items).

[Meika]

We're in a very nervous holding pattern here. My husband is an automotive engineer and I'm a stay-at-home-mom; we live in Michigan. His company begins layoffs on November 17. Our second child is due November 15. Great timing, eh? I'd be okay with going back to work, but it's not really feasible with the timing. Plus we've chosen to be a one-car-family, meaning that we'd have to buy another if I were to go back to work. But who hires just weeks before Christmas? Nobody. Even if anybody were making enough money to hire.

We're in decent financial shape - we've spent most of the last three years paying off debt and have no credit card debt, paid off the equity line (but have put some on it just recently as we're finishing the basement before the baby comes), have far more equity in our home than even its current value (not that that matters if no-one can get a loan!), and own our one car outright. We live beneath our means (I'm pretty cheap :). But we've neglected our emergency fund. We have nowhere near what we should given the state of his field. And while we've had enough warning that we would've been able to build this significantly in the last couple months, we've chosen to use a midwife for this birth and we have to pay her out of pocket before being (hopefully) reimbursed after the baby's born. That's taken most of our excess.

If we survive the layoffs? We'll be relieved beyond words and should be fine. We're in good enough shape that with a little extra time to build our emergency fund, we should be in good shape to weather the inevitable next round we expect next year. If not? We'll be praying a lot. Things could still be okay, but we'd be on the edge with a lot of others.

[Meika]

Oh yeah, and if you happen to know any kids in college who want to go into automotive? I'd discourage that. Vigorously.

[Alma]

We're nervous. In the immediate sense, we paid off our mortgage two years ago, own our own cars and my husband is in a fairly secure position with the county. I'm starting a part-time per diem job next week. That being said however, our usually prudent, stay-in-the-market-at-all-costs broker called today to recommend we get completely out of equities right now. And that left me dumb struck. (Our investments aren't huge, but we were fortunate to have socked away as much as possible in the early years. So, please don't think I come from the perspective of the elite here).

We've watched the food and gas and energy costs rise over the recent past and we're certain it's all due to get worse. We've joked, but only sort of, about whether my vegetarian husband will eat boiled shoes when the Depression arrives for real. It's going to get bad, for everyone. We are fully prepared for having to help make sure everyone on the block gets to eat at least one meal a day. My mom is seriously worried about layoffs where she lives, so I'm already trying to figure out how we can move her in if it happens. My MIL is makign contingency plans to get out of her art studio lease and paint in her one bedroom home.

I hope it all settles out quickly and few suffer in the interim, but these times are unpredictable and the world has faced great hardship before. We are not immune from the misfortunes of time. No one is.

Well, that sounds dire and gloomy.

[Nutmeg]

Well... in some ways, we are lucky that we were just scraping by the last couple of years, with my husband in residency/fellowship and me in gradschool.

In August, he started as an attending physician and suddenly started making more than twice what he had been making. So... just as we got hit with this, we are in the best position ever and for the first time in my life I can take a breath.

Money is pouring out of The IRA I got when my father passed away, but I try to think about that as just gravy, whatever is left. We bought our house near the top of the market, so we'll probably be upside down on our loan, but don't plan on selling our tiny house for several years and hopefully it won't be by the time we sell.

I'm concerned for others, and we are upping our donations to be something closer to 5% of our income this year, now that we can afford to. We aren't wealthy, but we are now living considerably below our means.

[AmyinTexas]

I have a massive pile of grading sitting next to me, and I need to tackle that... but I have to chime in.

As a college prof at a community college with a high school teacher husband, I feel pretty safe in terms of our jobs. My issue is my own credit card debt. I can afford the payments, and I try my hardest not to use them (I ran up the balance after my divorce), but, wow, it's hard to pay down the balance when my husband and I have three kids who all go to private schools, a 70 yr old house that is in constant need of something, cars that are beyond warranty, etc. Each month I think, "This is the month that I can lay extra away or put extra towards my credit card balance" but something else always comes up. It drives me crazy.

[anon]

Work at a small company. Don't know the financial situation, but I my sense is that as long as people paid their bills we'd pay ours off eventually too. But, since all the newspaper coverage, checks have been slow to come in and I notice collections people calling us left and right too. I suspect some of this just has to do with our boss being out of town and different people taking the call - but I know one of our clients with whom we've had a long solid relationship has said they'll pay their invoice once their clients pay their invoices, and they're not seeing checks either. Seems like the beginning of a vicious cycle. Or, I might be blowing it out of proportion, because it affects me. How to know? *shrug*

I figure my 401k is fine, because It'll be 20-30 years before I can even think of retiring. But, it does leave me concerned about my parents, in-laws, and retired neighbors.

I worry how some of what they're talking about in the paper is complicated and hard to understand, and scary. So, how much will people act out of fear that will create self-fulfilling prophesys.

[Eva]

We want to sell our home so we can move to Sweden, which we've planned long-term. And now that's looking quite a lot harder to do. It's very frustrating and, for my husband, upsetting. We've finally saved up enough to move but now we're stuck.

+++

I've never heard of lowering balances, but the interest rate possibly.

[Zoe]

Ahahaha. Haven't you heard? Iceland's going bankrupt.

Or so the world seems to think. The banks, at least, might be going down, despite having been taken over by the government, but they refuse to pay the ridiculous amounts of money it would take to keep the banks afloat, so if they go down so be it. Iceland it self should survive. You can always make more banks.

Honestly, I can't really tell what's going on or what's going to happen, because it changes every minute. So far nothing major has happened for the average person, unless they had a lot of their savings in stocks or shares, in which case they're SOL. And, if they work in financial services or in companies that are owned by those companies, they might be losing their jobs. And a lot of people have mortgages and car loans in foreign currencies - those are skyrocketing, so if you bought at $10.000 car you might now owe $15.000 for it. The currency has plummeted 70% in the last few months... etc etc etc.

Good luck to everyone and if you ever want to travel to Iceland, now's the time!

[eva]

My worry?

I was overjoyed a couple of months ago when my husband left his job at Big Bay Area Internet Company and moved to a start up in San Francisco because it meant that he was no longer commuting 3.5 to 4 hours a day. He worked very hard, was essentially absent 5 days a week as a husband and father, and I hated it.

I knew it was a risky, but I figured that if something happened to the start up then it would be as if he'd taken a 6 month contract and he could look for other work. In the City, since he refuses to move to Silicon Valley.

His start up is looking for funding for January or February in this market. We're COBRAing health insurance at $1350 a month, and almost certainly can't self insure because of my daughter's history of hip dysplasia and my history of depression and a complicated pregnancy.

We're fortunate. We have real savings and no mortgage and a (too small) apartment at what passes for an okay price here. The sky isn't falling and compared to many, many people, I have nothing to whine about. But I can't help but be worried, and in some ways I feel as if I pressured him into leaving the larger company.

[m]

I am in Canada and the crisis hasn't really affected us, yet, not like what is happening where you are anyway. But I am scared. Not necessarily because of the crisis, but it is exasperating my worries.

We moved to a new city last year because my husband got a two-year contract (non-renewable). We decided to buy a house for many reasons not worth mentioning. We now know that we bought at the highest peak this city has seen. We could not sell it for what we paid, so right now we're stuck with it. It's an old house (1930s) and our home insurers won't renew our insurance because we didn't fix our foundation because we can't afford to right now. (Our inspector didn't catch the foundation troubles when we bought the home and we had signed something saying we wouldn't sue if he missed anything.) We're currently living without house insurance and it stresses me out completely.

My husband's contract runs out in April and we've decided to stay here for at least one more year, mostly to figure out what we want to do next/where we want to go.

Right now I'm a SAHM (two boys, 2.5 yo, 7 months) and have zero income coming in. We're both writers (he's a playwright and I'm a poet) although I haven't had any time to write lately. We don't know what we're going to do for income when his contract ends. He has some plays being produced this season, so we will have some money we can squirrel aside for the summer but it won't last for a year.

We live very thriftily. We have no vehicle, never eat out, never go out, use cloth diapers, line dry as much as possible, cook almost everything from scratch, etc. I don't see how we'll be able to cut down things even further.

I know it sounds like this is all our own doing, and it mostly is. We had thought that the boom was going to continue and that we'd be able to sell when the contract was up and we'd leave town with a small profit. We were wrong and it's not the end of the world. In fact, it's very small potatoes compared with what many people are facing.

All that said, I'd like some advice. We live in a city with four post-secondary institutions. I have an MFA and was thinking of approaching them for sessional work. I was wondering if any of you academics in Moxie-land would be able to offer me advice on how to pitch a class? Or have suggestions where I could find that information?

[Hope]

As an American living in Australia, I feel lucky to be here and not in the US on the moment. (Although I would love to move back.) In my life before baby, I worked on Wall St. so I think I got out while the getting out was good. I worry about the world in general and wonder if we should have baby 2 or not. I feel lucky that we are financially secure (for now). Will continue to live below our means and save as much as possible.

[Jennifer]

Even if I don't feel a painful pinch, I do feel horrible for families and individuals going through hard times. I'm really surprised at some of the attitudes here! I don't watch much TV or listen to hyped-up news; I just hear what people tell me about their situation, and it's enough to tell me something is seriously wrong.

[Amy]

I am moving between relief/serenity and full-fledged panic. I was laid off two weeks ago, and it wasn't even attached to the economic crises in any way. It was a series of pretty awful political manueverings by others, and the short-sightedness of a VP. So now I'm out of work at the worst possible time. Our only debt is a small car loan and our mortgage, but my husband's industry can be volatile. But I have to say - all of this is making me feel like the whole country is finally imploding from its excess and gluttony. Part of me would be perfectly happy - even relieved - to be forced to drastically simplify our existence.

[Megz]

We actually saw this coming and have bought a small farm, from which to eventually become semi-self-sufficient. The riskiest part was buying the farm before we put our current house up for sale. But it has just sold yesterday in less than three weeks on the market. So although our news media keep talking about a real estate downturn, it hasn't affected us.

Our economy in NZ is in a pretty good position heading into this recession. Food and petrol prices have been rising steadily over the last year. There is talk of cutting interest rates. With our election also looming in a month, anything could happen. I'm just glad that my family is prepared for it.

[hedra]

Worried and not.

I'm with the 2-3 year read on this one, though. Up to the end of last month, I was working in the financial industry, where they were already laying off (but more due to corporate needs than the markets). Everyone there was pretty clear that it was a 2-3 year picture, and that things were not going to be flowing easy for a good chunk of time, but that even then, nothing is permanent, and we will eventually come back out - the emphasis was on keeping heads down (worry but not panic) and bodies fed until then.

My contract had already been extended to three years from a 3-month deal, so I wasn't miserable about the unemployment.

Except for the dearth of offers over the last six months. As a contractor on 1-3 month extensions of contract, my resume was *always* in circulation, and I was usually fending off headhunters at the rate of 3-4 a month. But six months ago, it dropped to maybe 1 a month, and 3-4 decent openings per week (rather than 6-8), and then in the last few months it dropped to maybe 1 decent opening a week, and the rates on those plunged. My last headhunter call was for well under half the expected rate.

So here I am, on unemployment (which is so much lower than even the half-rate - but the half-rate job was also more than an hour commute, which I cannot do...). And hey, ep's job is market-affected, too, because when the market goes down, companies are less likely to design new construction. Might continue building, sure - but design? Not until they feel hopeful about the future direction. Layoffs at his work already hit the first round. He's still working, but it means he's working harder and longer hours to make sure he's on the very useful people list. On the plus side, I'm at home, so I can take up that slack.

Next month, we pull the kids out of after-school programs - haven't this month because getting them back IN is hell, and the last time I was unemployed it only took a few weeks to find a job. Fingers crossed. Meanwhile, writing the book proposals is the first priority, setting up the website the second, and finding freelance copy writing jobs third. Kind of overlapping, though.

I'm sure our retirement funding is sucking wind right now, but we aren't freaking AT ALL about that. It's more like a sigh. Ah, well, down, up, down, up, we have time, and my main hope is that we'll find a way to have money to invest during the down market. Buy low. Our Financial Advisor is a smart cookie, and while he's not psychic, he's very good, and we have reasonable faith in his judgment. He's taken some hits, I'm sure, because some of his clients are near-retirement. We're not.

And again on the plus side, contracting usually doesn't decline during a down market to the same degree that full-time/perm work does. Yes, the jobs get less pay, and the offers are less frequent, but in a longer-term down market/recession, the companies save more by not hiring full employees (and therefore not paying benefits, etc., and being able to cut contractors at will whenever anything changes), so they look to contractors more. Plus it comes out of a different pocket, so to speak, on the accounting side.

A number of people have told me I don't look stressed enough for someone whose family just lost 2/3 of their income (yeah, mine is the bigger one). But ... well, even if I don't sell a book, and don't make a profit from my website, and everything goes to hell, we have backup - family, friends, more family. Two sets of family (three, really) with solid-plus financial pictures, one of whom just told me last week that there is no way we'll go hungry as long as he has any money at all. And he's got scads. He's not handing me checks willy-nilly, but he's keeping an eye on me and mine. Worst case we could move in with my mom and rent our house (college area, NO trouble with rentals at all), or sell it (we get random offers through the mail from one major land-owner around here about once every two years, likely that would still be the case if we wanted to sell). Not going to sell, but rent is possible. So, backup plans exist. Not great fun, but exist. We will not starve, or be on the street, so there's no underlying 'oh, crap!' feeling. Just carrying on for now. Carefully.

[paola]

I'm pretty worried at the moment, especially seeing they have been saying this will be the worst recession( wupps,I was goign to say 'regression'- I bet you can tell what's really on my mind)since 1929. During the Asian Economic Crisis of 97-98, I lost my teaching job and was out on my bum, so I have experieced the effects first hand, and know they touch everywhere.

I'm in Italy and they say our banks are safer than anywhere else in Europe, but I have no idea why. Each account holder is insured to 103,000 big ones, I believe, so we're unlikely to lose anything if they do go under.

Still, hubby's company (telecommunications)has had to make cuts, but he is in middle management there and so his job looks safe. Nevertherless, he is regretting the decision he made to stay put (after he had been offered a pretty good position in a Chinese Teleco. company). Too bad that I also work at his conmpany teaching the CFO and since budget has been cut, so too has my job.

[Shandra]

I'm in Canada too and so far so good.

I am worried more about my husband's job because his company is more brutal than mine about making big cuts. If that happened it would be pretty tight 'cause most of our savings are locked up and we'd prefer not to get them out. This has been a bad year for dipping into the emergency cash fund.

But our biggest expense is daycare, so if one of us were laid off at least that would balance out somewhat.

As far as our house goes we're in a pretty good position - it's our second house and we put almost 50% down, and kept our mortgage payments reasonably low. We are carrying a bit of consumer debt (line of credit) that we are tightening our belts to pay off faster - hopefully by the end of the year.

And I just bought a new car and financed it, but I'm kind of glad because apparently interest rates are rising and I got one of those 0% deals even though probably we didn't negotiate as good of a price.

I am worried about my parents & in-laws, particularly my father in law who has been a bit of a player in stocks.

M - I was talking to a dean here in Toronto and with the boomer-echo wave passing in post-secondary institutions I'm not sure they will be opening too many new classes. (If you're out West they well might be though.) What might bring in smaller dollars would be to open your own local class for $30 a head or something like that. (You'd want to do the math on sessions/times/location/etc.) Have you freelanced?

[shirky]

@SarcastiCarrie
So I actually did buy a supermarket rice for about $10 for the 20 lbs and my wife refuses to eat it! She only likes the fancy stuff I guess. I just remember last year at this time for diwali I bought a 20 lb bag at the indian grocer and it was 18.99. Now? 38.99!! I blame fuel costs, the weak dollar, and bad harvests in asia.
I just hope people in India aren't having to pay prices like this; while we have tons of food options, not so much over there.

[SarcastiCarrie]

shirky - I hear you. There are some things that, if at all possible, it's just not worth it to scrimp on. Apparently, rice and toilet paper.

[Mrs. Higrens]

Today's local paper had an article in the opinion section written by a professor (at one of the local well known colleges). For the past couple of years he's been researching the crash and depression of the 1890's and his stance was that what we are going through is much closer to the 1890's(?) than the 1920's (internal vs. external causes). I wish I could add a link to the article (it's not online, I checked), as his description of the events leading up to and after the crash at that time are eerily similar to what we're seeing today.

I'm concerned about how what's going on will affect my employment in the residential construction industry; DH's not so much as he's in an industry that doesn't seem to be slowing down. Still, we have a mortgage on our home and on a condo in a vacation location, 3 cars (only 1 with a loan), and 30 and 50 minute commutes respectively (one with a $5 daily toll). At the same time, we're very lucky to have a significant financial pillow thanks to prior generations, and while we're still working on starting a family (which has it's own costs thanks to fertility issues), overall I think we will be okay in the end. It's just waiting out the ups and downs until everything stabilizes again that's going to be rough for everyone.

[Mrs. Higrens]

Jeez, apparently I didn't look hard enough earlier. Here's the link on that article. (it's also the 1870's not the 1890's)

http://www.dailypress.com/news/opinion/dp-op_nelson_1009oct09,0,1077459.story

[Agnes]

I just can't figure out how much to worry about everything. My husband and I have secure jobs (I'll be up for tenure in 5 years, but at least for the short term), no debt, and good savings. But when people are screaming "meltdown" "panic" "worst since the Great Depression" "countries going bankrupt", does that help us? Student loans disappear, how will universities stay in business? Can the FDIC really support every bank in the country? It may just be my ignorance, but the level of hysteria does not seem to be consonant with predictions of a 2-3 year recession with 8% unemployment (I know this would suck, but it's not the end of the world.)

And how on earth is the government going to pay for all this??? I would be fine with paying more taxes if it would get things stabilized, but apparently taxes are verboten.

But until we actually are personally affected, I plan to give more to charity, continue paying to get the house cleaned, and make sure that I don't stop buying from small businesses. They need all the help they can get, and I figure those of us who are lucky should help them out.

Someone asked whether semi-expensive day care would be the first to go? I don't know about corporate day care - it might get cut as someone posted was happening to their husband's work - but I think it would actually be easier to find a sitter/in-home daycare. More people looking for jobs, trying to offset a husband's pay cut, etc.

[rayne of terror]

I'm not too worried. My husband and I have doubled our income since one year ago, our mortgage is an ARM but we've still got a couple years to shop for a fixed rate at a good interest rate. Our credit scores are excellent and we're making in a big dent in our consumer debt every month. If you had asked me one year ago I would have been out of my mind with worry over our personal finances. Definately check out the Dave Ramsey info, folks. His action plans are do-able.

[m]

@Shandra - Thanks for the info about the boomer/echo stuff. Hadn't even thought about that! Yes, I'm in the West (Edmonton, to be precise) and there is such an influx of families moving to this city I don't know if the institutions will experience the same boomer/echo lull, but very well could.

Back in Vancouver I taught at a couple of community centres and I have to admit, I wasn't crazy about it. The level of commitment was so low and the levels of interest/talent were so varying that I soon tired of it. (I did it for about 18 months.) But yes, it definitely could be an option. Haven't done tonnes of freelancing and any I've done has sort of just fallen in my lap. Any time I've tried to pursue it, it had been very difficult and nothing really came of it. But you are right, it is an option to consider.

[Claudia]

Checking in from Denmark. It seems a mixed bag; there have been a couple of failed banks, a couple of consolidations, but I don't hear much about people getting the short end of the stick for it. There is a federal deposit guarantee of about $40,000 U.S.

However, someone told me that he saw a poll that said 26% of all working Danes fear losing their job. And unemployment is very low now 00 1. something percent, but everyone expects that to shoot up soon.

@Maria-- I wish you much luck, and I hope it's the right decision for you and the lil one.

[Claudia]

That should read that unemployment is one point something percent. I don't know where those zeroes came from.

[Foster]

I am trying to care more, really I am, but other than that vague panicky OMG!!! feeling, I just cant do it. It has been a little over a year since my fathers unexpected death. 13 months from diagnosis (pancreatic cancer) to death. He was only 54. That right there was my personal 9/11 ~ nothing for me has been the same since. Nothing is secure or guaranteed. Money and waiting became non-existent. My mothers house is paid off and she has a huge back yard. If it gets that bad, well move in and plant a giant garden. She said she would rather help us pay our mortgage than have us have to move in, lol. At any rate, our house was not expensive, Im a sahm, and dh just got a promotion today. Im not letting anything financial ever prevent me from having more kids and we are actively trying for #2. God will provide.

Last week, my best friend from high school suffered a ruptured brain aneurysm and almost died. She makes little to no sense when she speaks. She is only 29. I cannot get worked up about money right now. LIFE IS TOO SHORT.

I am worried for everyone else. Those who I feel most bad for are the ppl close to retirement. It's so unfair that, once again, regular ppl have gotten screwed over royally by big business.

[Foster]

Oh, and we have followed Dave Ramsey since before we were married, so aside from our mortgage and a v small loan we just took out to get a new boiler, we are debt-free.

[mrs k]

I know I'm a little late to the party here, but I don't know how I feel about all this. I work in alternative energy research (which is a GREAT industry to be in with the current state of our energy affairs). My job is technically within academia (state employee in a state with a billion-dollar-plus surplus), so I'm not too worried....but I also know that a lot of our research funding comes from the government (hello $700B bailout!) and from private corporations (credit freeze?), so I do worry about that part a little...though I haven't seen a slowdown YET.

DH and I live within our means, but we don't have a lot of savings (2 months worth, maybe.) I'm the primary breadwinner (DH is Ph.D. student...but at least he has a stipend)...and if I were to lose my job, we'd literally be screwed with a capital S. We wouldn't even be able to afford our mortgage payments...HOWEVER...we live in a relatively isolated area of the country where we truly are somewhat immune to the mortgage crisis and crazy economy troubles, for the most part. We don't have any large corporate employers in our area to worry about going down...everything is pretty much stagnant/stable all the time.

We're looking to have a baby sometime next year or in early 2010, and we have some more upgrades to do on our house first. However...we're currently on a save-as-much-$$-as-possible game plan to boost our savings in the case of emergency and have curbed our discretionary spending as a result. I wonder how many others in my area (stagnant economy, remember) are doing the same thing...and then the economy wouldn't be so stable...something to think about.

[Christie]

Um, I am also late to the party, as usual. I am in Japan, and work part-time, teaching English to children. My company went bankrupt suddenly, six weeks ago, but this was NOT due to the current problems, but to a gradual decline in students over the last few years. The Japanese economy fell into a recession a little over 10 years ago, and after the initial shock, people gradually adjusted to living in a slower-growth economy. Gradually, more and more people wanted cheaper, nearby English lessons, not the pricey place downtown. My workplace had been struggling for years, and finally just gave out.

I found another job within 2 weeks, but it fewer hours and pays 2/3 of my previous (already insufficient) salary. I am using the time at home to try to clean more (having a cleaner house won't cost me anything!) and plan more economical meals.

Japan is feeling some knock-on effects from the problems in the U.S., but one good thing is that we were already in a sort of low-grade, long-term recession here, so there is not as far to fall from, and a lot of people are already used to living frugally.

In the run-up to the current crisis, we have (like the U.S.) had rising gas prices, rising kerosene prices (I live in the far north of Japan, where kerosene is the most common fuel for heating homes), and rising food costs. Flour and bread products have gone up in price about 10% in the last few months, which is manageable, but the really annoying one to me as a Westerner (in my food tastes), is the great increase in the price of cheese.

I live in a part of Japan famous for its dairy products, but it seems (as far as I can tell) that the grain to feed the cows comes from overseas (the U.S.?), and has gone up in price because the grains have been diverted to biofuel uses. So, I don't know if the farmers here had to destroy some of their cows, or what :( , but anyway, cheese prices went up suddenly over the summer and stayed there. I shop around, but in one store a bag of store-brand shredded cheese (this is the cheapest kind of cheese here) that I used to buy for around $4 or $5 went up to $7, and I just can't justify buying it. I now avoid making quiche, and no longer sprinkle cheese willy-nilly when I cook Mexican food, make sandwiches, etc... this is good for our health, I guess...

One of my kids goes to private school, so we are barely making ends meet, with occasional cash gifts from relatives. I am worried that at some point the owners of the house we rent might decide they need us out so they can sell... we cannot get a mortgage since we are both foreigners, and start-up costs are very high when you go into a new rental agreement.

The U.S. (my home country) and certain other countries have been living the high life for a long time, on the backs of other, poorer countries. I hope this can be a reality check for us, especially for that section of people who had inflated paychecks. My dad told me yesterday about an executive in the U.S. who had earned $350 million over the last 7 or 8 years - !!??!!

[canagirl]

rbelle - That's very generous of you. I just exchanged pricey birthday gift clothes for stuff on sale that my daughter can grow into.

And to the woman debating going on vacation... please go on a vacation that you can afford, even if it is a short one. You deserve it.