Are you guys hunkering down money wise?

[Tig]

Last recession I had plans to build a house, so I did. I didn't find much difference in the cost of labour but there was no problem getting people on short notice. I used to joke that I was fighting the recession on my own. On dec 22nd we moved in and I found out that I was loosing my job in 60 days. I didn't share that info with my wife untill after Christmas. I found another job. Ya gotta believe!
Now I have plans to build again next year. Wish me luck.

 

[pennwalk]

Just as an example I have a friend who works for a small company. Because the stock market tanked the pension fund lost value and the owners have to make up the difference. If the owners don't have the cash they have to borrow the money. Problem is that the bank doesn't want the lend money right now. So what do they do? Worst case is they have to declare bankruptcy. Then even though the company has work all those folks are out of jobs. So it looks like to me you could have a fully operational company taken down by the economy.

Chris

 

[MikePA]

because right now he may not be impacted but in a wider/larger break down, he could be........

And he might not be. What does what someone who works in another state, in another job have to do with what I do? A self employed carpenter who builds new houses is different than someone who works in IT. It's got nothing to do with me smoking anything. There are plenty of jobs that are recession proof and there are some that are not. Each situation is unique as is each area of the country. There are people who thrive in a recession and those who do not.

There are far too many people who are trying the fan the fear flames because they benefit personally from keeping people scared.

 

[MikePA]

Because the stock market tanked the pension fund lost value and the owners have to make up the difference....Then even though the company has work all those folks are out of jobs. So it looks like to me you could have a fully operational company taken down by the economy.

No, it was not 'taken down by the economy' it was taken down by poor investments. That can happen regardless of what the larger economy is doing. Even now, not all stocks are going down. In fact, it's a great time to buy stocks, cars and trucks given the prices.

 

[pennwalk]

I used to know a couple of guys who salvaged computers for gold. I used to think they were a little nutty to have cashes of gold bars buried in the back yard. Now I wonder if it might not be a good idea to have a little something set aside.

Chris

 

[L4400]

We are. Actually, just paid off the credit card yesterday. There are some things I would like to have, but we are going into money saving mode for the time being. I THINK both of my jobs and my wife's job are secure, but we would like to be prepared for the worst.

 

[MossRoad]

There are a couple of things I'd like to buy (tractor implements, computer, new car). I am wondering if I should put that credit card down and leave my wallet in my back pocket so to speak. I can't tell where the economy is going but it is making me nervous. What do you think?

Chris

Since you asked , here's what I think....

Tractor implements:
Tractor owning is an illness and you may need the help of a professional.

Computer:
What's wrong with your old one? Apparently nothing, as you posted here on TBN.

New Car:
This is the only serious answer I will give... New cars are the biggest waste of money EVER! If you are serious about conserving your money, buy a good used car. Let some other sucker take the hit on depreciation.

Are you debt free?
Do you have a plan to get debt free?
Do you have enough cash on hand to pay your bills if you lost your job for a year?
Do you have good insurance?
Is your retirement funded?

Yes, I'm nervous, but we are also very conservative in our finances. We are debt free, have been for quite a while. We took a beating in the stock market last week, but we have taken beatings before and rebounded nicely by staying with our plan.

 

[SPIKER]

this is longer post but I'll give more info if you want to read on after quick reply I'll provide a bit of info regarding how/where USA is at.

that thought/question is a good one, one thing people have been doing is spending way beyond you're means. this is what you should be doing below.

Everyone should not need to be saving all their money 24/7 living in dark hole but it also means you should keep AT LEAST 6 months of savings (enough to cover every thing you spend over a 6 month time) in the bank... that is like $10~15 grand to pay every bill and live with good food ect for 6~10 months in case you loose job ect. If you have 2 new cars a tractor payment home/farm loan insurance ect then you need more but if every thing is paid for good cars trucks paid off home paid off then as little as 5~8K dollars in bank will hold over most people for 6~10 months.

now if you don't have that much in bank I suggest you stop spending ... DON'T use credit cards unless you pay off balance at end of month. Know what you can and can't afford and don't let a real estate agent/loan agent convince you that you can afford a million dollar home unless you are making 500K bucks a year.

the banks are more than willing to help, (last year they found out that they can keep giving people loans to buy 200~300k dollar homes when they make 50K that person then trys to keep in their home for 1 year or two putting every thing on credit cards causing more dept then eventually the home gets foreclosed on and bank is stuck and person files bankruptcy and the banks are stuck, and the person walks away and the banks are stuck, seems every one is blaming the banks, when there are more involved than the banks there are 100K people that are not smart enough to know when they can and can not afford 300K dollar homes and let the banks tell them that they CAN (but leave out the fact that they can't buy anything else other than the home or go any where other than work) these people kept living like they were in 50K home buying every thing they wanted. so now you have some banks and some idiots over spending/over borrowing and the rest of us are suffering for it. that does not mean that if you have $ in the bank you need to pull it out though which is what has been happening especially when you have 100K + bucks in bank (not all that much if you have a small business or retirement fund IRA ect) banks loan out the money that they have in there, if every one makes a RUN on them to pull out they CASH then the bank can't loan AND the bank then is insolvent due to laws/rules that say the bank has to keep XXXmillions in there to cover prior loans and credit that they have extended. then FIDC takes them over like WAMU & AIG & Freddie & Fannie ect. WB (Washington Mutual was different and screwy in my opinion as a lot of people were hurt when feds helped sell them off.)

now the bail out bill is a LOAN to buy all these 300K homes that were taken back from people that walked away from the house. the loans are backed by the real estate and when the FEDS buy these blocks of homes they will be getting the homes to sell at a later date when things are better as well as when they lower the prices back to what the home is valued at not over inflated by the boom in house prices. it may take a few years to SELL these homes buying them CHEAP from banks that are in trouble and selling them later the feds will make money. the feds are probably be paying 10 to 40 cents on the dollar for these blocks of home loans. so they are basically 100K for a house that sold for 1 million bucks... eventually someone will be able to pay soy 300 or 400 K for that 1million dollar loan and there the feds made good money in long run. this is basically how the great depression was held to be solved...

NOW if you have say 100K in the bank for IRA and or just savings then I would suggest you start investing in something other than cd's. T bills and the like. they are low interest but mostly safe. Stock Market seems to be nearing it's bottom so it is good time to get in there is plenty of room to go UP. if you do buy stocks that every day people will need to buy regularly and that pay dividends which is extra form of payment that the company gives to share holders... "

BUT REMEMBER THAT STOCKS ARE NOT 100% SAFE and you can loose a good part or even most of you're investments..."

 

[MossRoad]

...There are people who thrive in a recession and those who do not.

Very true. Look at this:

When we got married back in 1985 we had to borrow money to buy a house. We paid 3 points to get the interest rate down to 12.5% . But we bought a very small used home that only cost 20G. And we paid it off in 5 years....

We both made about $7.00 bucks an hour back then, which was about double the minimum wage.
$7.00 an hour in 1985 was = to about $14.00 an hour in 2007, which is still about double the minimum wage.

That 1985 20G house (which we sold in 1995) is now worth about $45,000. About the same when comparing 1985 to 2007 value.

My point is, while the numbers may get larger, in actual worth, they have remained pretty constant over the last 23 years that we have been married. And there have been several recessions, setbacks AND advances during that time.

I believe the reasons my wife and I have not felt many ill affects from the economy over the long haul are that we are conservative and do not live up to our means. We live below our means and pay as we go. By living below our means, we have gained. We have two great children, a small warm house (that creaks when you walk through it), a couple decent used cars, the kids go to great private schools, money for retirement, etc...

The future is always uncertain, but it is uncertain for all of us. Come up with a plan to get out of debt and stick with it over the long haul.

 

[zionview]

We're still spending a little, but we're watching what we spend on(home improvements with a payback). We never did live lavishly and never will. We paid off the money we borrowed to help the kids through college and we're banking that money now. Last Spring I started thinking about retiring. I like to keep busy, so I was looking around for a "fun" job to keep me busy and fund my shop projects. Two weeks ago,the fun job fell in my lap, the stock market crashed, and I haven't heard back from the "fun job" since! For now, I'll continue my old job, in case the kids need some $$ help.