Haven't seen it put quite like this before
I saw an interesting article on CNN today (which, unfortunately, I can't find any longer) about how the days of easy credit are gone and how changing economic conditions are impacting consumers. The article noted that many people, particularly chronic credit abusers, can no longer fake being able to afford luxury in their lives. For the first time since the Great Depression, it's likely that the average standard of living is going to go down instead of up.
Wow. I hadn't thought of it in those terms, but there it is.
I honestly don't anticipate that happening to me to a very large extent despite the painful inflation crunch, both because because my job is secure for now (I'm actually hiring a new direct report!) and because I never really left my starving student roots.
How about you? Do you feel like the good old days are firmly behind you for the next few years?
How about ten or twenty years from now?
8 retorts:
I saw this article, too. I have to say that I agree with this. What a concept: don't buy it if you can't afford it.
http://money.cnn.com/2008/08/18/news/economy/Colvin_next_credit_crunch.fortune/index.htm?postversion=2008082013
I think the economy is going to slump for at least a few years, but I don't think it's the end of the world, either. I've always been thoughtful about my money (not as much as you, though), so all I owe is my mortgage. And I have enough easily accessed savings to last for a year or more.
I worry, though, that the economic downturn will be longer and deeper because the media "pundits" keep harping on how bad it is. For example, the media does stories on people walking away from their homes and mortgages, so more people start doing it (and yes, I'm in a position to know that it's happening on a more frequent basis). Self-fulfilling prophecy. And irresponsible journalism.
Having said that, I think that
Here Here to the irresponsible media comment. I don't even watch TV, listen to radio, or read the new anymore because of the media.
Mr Chiots and I feel very secure in our current financial status. We have always been very frugal and continue to live that way even though we make much more than in the old days. So I think the great days are still to come, especially in 3 years when the mortgage will be history - YEAH!
What bugs me is people that feel no responsibility for their financial decisions. It really stinks that because I am financially responsible, and I am being forced to bailout the people that weren't. Makes me hoppin MAD! And most people think that it was the banks fault, not the stupid people's. ARGGGG.
My husband and I still live much the same as we did when we were broke and paying off debt that we incurred to start our business. It's doing well these days, and we have a lot more money than we used to, but we still live in the same house, drive the same cars (a '90 and a '91) and spend most of our free time doing free things. We go for a lot of bike rides with our son in the bike trailer - doesn't matter how bad the economy gets - we can still do that. And these days our only debt is our mortgage... which we're working on as fast as we can. So while the prospect of continued bad economic times doesn't sound good, it would sound a lot worse if we had inflated our lifestyle as our income increased
FMLurker - Very good point about media and its role in the downturn. Let me churn this one for a couple of days; I think it'll be interesting to write about. Many thanks.
Susy - You just named one key reason why I'm annoyed by the federal mortgage bailout. I realize that there are predatory lenders and that the banking industry was playing fast and loose with the law as a whole, but I'm astounded by the utter greed and/or lack of common sense that many, many borrowers displayed in cashing out equity to shore up debt. I don't think that kind of behavior warrants a bailed out.
frugal babe - Your life sounds a lot like mine. Well, except for the baby. And the husband. The thing about life style inflation is that it makes retrenchment really painful.
Pain hurts, so don't set yourself up for it in the first place.
PS - FMLurker - thank you for finding the article! That one was driving me nuts.
I am probably not in a position to answer this. I was raised to be frugal. Plus, I'm on disability and my husband is on unemployment (though we're still managing to pay down debt).
We're a little burned out at being in debt still -- we were getting close to paying it off when, a month before the wedding hubby got laid off and, since we didn't want to have to explain why he asked for unemployment and then took a two week vacation, he didn't go on unemployment for almost two months.
That said, we're watching his student loans disappear and then we'll attack their big brother, credit card debt. So I'd say things are actually looking up, for us.
abby - Thanks for telling your story. It sounds like you've been through a lot, but I admire your perserverance and the high standard of ethics with regards to how you handled your husband's layoff. I'm glad things are looking up for you and that all your hard work is paying off.
I think tough times are definitely ahead...there have been a lot of rumors in our office lately about layoffs and/or paycuts. So far, no one in our building has been affected, but we're seeing fewer projects coming in, so the slower work gets, the more nervous we get.
I'm trying to get out of debt and save $$ quick before things get any worse. With little collateral and no savings right now, I don't have anything to fall back on.
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