Ten Ways to Recession Proof Your Life
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Before I get started here, I just have to say that at this point I think we're all basically screwed and that trying to recession-proof your life is like buying a fire extinguisher and a smoke alarm during the Chicago fire.
I mean, it's a nice gesture and all, but...
That said, I do think that lots of people will be living very differently from now on no matter what the talking heads on the news say about the state of the economy. In the U.S., we've had a "consumer economy" for the past 25 years or so and now we've pretty much consumed ourselves into oblivion.
Anyone who can't see that the end is near at this point probably works for a cable news station or Congress.
What follows are ten quick tips that can help anybody to become semi-immune to the now increasingly bipolar swings of modern finance. Nothing here is new, and none of it is glamorous. It's how my grandparents had to live, and maybe yours too. Take it or leave it.
- Pay off your house. Financial experts will tell you not to do this because mortgage money is cheap and the interest comes off your taxes. I would ignore that advice, because the people giving it just ran the entire planet into a ditch. You have to live somewhere, and it's always nice if that somewhere is indoors. For a long time I advised people NOT to buy any of those $1,000 houses in Detroit. Now I'm not so sure about that advice. I'd say that if you can pick up a house for cash right now (and you can) and it's not located in Hell (i.e., Detroit), do that. If not, send as much over and above your mortgage payment as you can every month and get that puppy in your name only.
- Get off the grid. Last summer we bought a high-efficiency multi-fuel stove to get off oil and gas, and now we are working on electricity. The infrastructure is so dated and crumbly where I live that every time there's a mild weather event we lose power for days. This trend is going to continue and energy costs are already high and about to go off the chart, so anything you can do to get out of that loop is to your long term benefit.
- Grow some of your own food and stockpile staples. Every year we put in a couple more fruit or nut trees. Our vegetable garden is struggling this year because it's been so dry and cold, but we still do what we can. Recently the public library hosted a talk on how to legally keep chickens in the city and over 100 people showed up. It made the front page of the paper. In my grandmother's day, everyone had chickens--they used to call them 'yard birds' and on special Sundays you'd go kill one for dinner.
- Move your money out of U.S. banks. Everyone should have about three months salary saved in cash in a liquid account that can be easily accessed, but anything over that should be moved into something that retains value: Swiss francs, gold, silver, land, beans, chickens, whatever. Energy stocks wouldn't be bad I guess, but trying to figure out the stock market right now strikes me as a fool's game. Setting up a Swiss bank account is not that hard. It's only glamorous in the movies.
- Develop multiple sources of income. If you still have a job, hooray for you, but it never hurts to have a back-up plan. I'm not saying it's easy to find other ways to generate income, but right now I'd say it's necessary. In the midwestern U.S. where I live most jobs pay between $8 and $10 an hour and many are part-time. You'll compete with hundreds of people for the privilege of working your ass off, half of it off the clock for free, for not enough money. If you put your mind to it, you can probably do better on your own.
- Make friends. I know it's all the rage now to divide up into tribal units and go about acting like a total dick, but in the event of hyperinflation or complete societal collapse, you're going to need as many friends as you can get. In fact, your survival might depend on it. So if you're having fun intimidating and insulting everyone you know who isn't exactly like you, you might want to rethink that strategy. It's your dime, but I'm just sayin'.
- Stop paying on your credit cards. If you still have credit cards and are sending some ungodly sum of money off to Citi or Bank of America every month, seriously, stop doing that. Those organizations are insolvent. You're just throwing your money into a big, bottomless pit and after all your money is gone, you will fall into the pit next. Nobody is going to be getting any more credit for a long, long time, so screw those guys. Take care of yourself. That's what they are doing.
- Stop spending money. I know what you are thinking. You're thinking, "How can the economy recover if I stop spending money? Won't the terrorists win if I don't charge things?" Listen: The terrorists HAVE won. It's over. I don't mean the terrorists who blew up the World Trade Center, I mean the terrorists running Countrywide, Goldman Sachs, Wells Fargo, the U.S. government... You don't need another pair of Made-In-China capri pants and you don't need that 75% off plastic crap from the Target endcap either. Think four times before you buy ANYTHING and then buy something used.
- Barter. I've seen a real decline in opportunities to earn cash any way any how. But lots of people are learning to trade what they have and don't need for what they don't have and do need. You can think of your talents in this way too. If you are good at say, web site design, and you need to replace your kitchen sink, you could trade several hours of your time designing a web site for several hours of someone else's time fixing your sink. Being as specific as you can usually creates the smoothest barters. You can also go to any of about a dozen new websites set up for barter transactions and get what you need through trade instead of with money.
- Walk. Walking is so good for so many reasons, not the least of which is that it's free transportation. It helps you stay healthy and alert. It gets you out into reality and off of the internet and cable TV. It increases your stamina. You meet people. One day, you may need to walk a very long distance just to get by, and if you are in good shape you'll be more prepared for that than if you haven't walked anywhere in years.
So those are my ideas. Nothing fancy here, nothing earth shattering.
I personally don't think we're in for a "jobless recovery" or any real recovery any time soon. The media are corporate owned and so is our government. Even though the horse is already out of the barn, there's no time like the present to learn some new (old) habits.
Personally, I've lived this way for most of my life. I don't think we are going to be seeing the "consumer economy" come roaring back, and what's more, I think lots of people are glad about that. There was something foolish and even sickening about the conspicuous consumption that marked the past quarter century, and my impression is that not everyone is sorry to see that go.
I know I'm not.
P.S.--If you want to start a tired political debate in comments, go ahead, but I won't be chiming in. This is a WRITING site, so if you have lots to say, you can and should write your own hub, not start a fist fight on mine. Thanks for reading. :)
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Comments
Your number 1 is my number 1, Pam. Debt used to be fashionable, now it's gone the way of Krystal Carrington's shoulder pads!
If you are in the Chicago fire I would rather have an extinquisher and a smoke alarm than not have them, inadequate as they might be.
We have to use whatever tools we have available and in financial terms this is a good list of things we can all do to make the most of what we have and improve our own personal financial security. I particularly like the idea that we should make more friends. I guess when times are good friends may have seemed less important but when you face problems they can be a lifesaver.
Help people when you are on the way up and they might just be there for you when you are on your way down again.
Hi William--Good point, I should have said that--that if you can pay them off, do that instead. Many people can't though and just keep ineffectively sending slightly over the minimum even though they know that can't help, and as you say, it's out of fear. Don't you think that using credit checks as part of job applications is a a way of intimidating people? I do. In some states, it's illegal to use credit scores for insurance underwriting purposes. The way I see it, the 'good' corporate job is about to go the way of the dinosaur if it hasn't already, but I know what you are saying. I've already dropped out of civilized society and at 56 no one is going to hire me to so much as take out the trash, so it's easy for me to say these extreme things. Thanks for your thoughts.
Amanda--Yes, I do think so many people are feeling that way now! Paying off our house is our number one priority. At least we'll live indoors if nothing else. Thanks for your comment!
Hi Tim--I think that is so true, about helping people. Right now there is this meanness afoot in the land, but I'm hoping it will pass. I do see a parallel trend that is more cooperative and more local, and I'm hoping that's the one that wins out. Thanks for your thoughts. :)
Here's a link to a NYT article today about how credit scores are being used against job applicants:
http://www.nytimes.com/2009/08/07/business/07credi
So, if you owe lots of money, it's going to get harder to find a job to pay it back. Seems a bit self-defeating on the part of corporate America, but oh well.
Great hub. I have been following your hubs and this is another great one. This reminded me of the advices Warren Buffet had given for the year 2009.
Hi Silver Camphor--Thank you for your comment. Wow, I ended up on the same page as Warren Buffet? That's funny! lol! Well, I've had worse company in my life! :)
Today is my first official day of no longer having a job. Your hub couldn't have come at a better time. I only hope you're wrong about the recovery and that it's coming soon. In the meantime though, I won't be buying ANYTHING and doing my best to hang on to what I have. Thanks for the hub.
Thanks for a great Hub on life decisions that can protect an individual from getting chewed up in market fluctuations. They will go on happening and this isn't the first time either of us have seen it. I can remember when a lot of these ideas like "don't pay off your house" and "Rack up a lot of debt so you look solvent" were sloshing around in the 1980s and made no sense to me. A lot of them had to do with things that large businesses do to cut corners on taxes being applied by individuals who weren't getting enough tax benefit out of it to make it a practical decision.
The people who were doing those things and coming out ahead were doing so with much larger resources, to the point where if the cash flow dipped they would be falling apart on taxes and debt, especially in industries where the profit margin wasn't that high. I've lost jobs twice in the past not to anything at all about my work or anything else but that the company got destroyed by one large client refusing to pay their bill.
I have one question. Who was talking about a "Jobless Recovery" and what exactly did they mean by it? If they were talking about restructuring tax laws and self employment regulations to make it easier for people to work for themselves and live on it, then that would be something I'd appreciate. If instead it's some Scrooge plan to just shaft anyone who can't get jobs and not bother dealing with unemployment issues then that's something else. Which is it? Is it both? Who's saying that?
This list is the most comprehensive, sincere complete list I have seen. You write what I have been preaching to my family, (I talk, they call it preaching). Purely an opinion as you say, but a good one as I say. Thanks, more complete than my original listing. Pay it off and pay it forward!
hmmmm #7 stop paying off your credit cards! Well I would really like to do that! I've been so programmed to pay them off and this is the first I've ever heard of not paying them. Gives me a new direction to start thinking but will definitely check this out further. Pam, you are such a good researcher and writer, would you consider #7 as a future hub? Oh, I would so enjoy that! :)
Nice Hub except I agree with other about #7. I have been unemployed since May, and cannot stop paying anything, because most larger corps run a credit check. My car insurance is up for renewal and when I called to inquire about the increase in the premium, it was due to my credit score. Looking forward to an update Hub.
Oh, this was well done! Down to earth, practical and responsible. My mother taught me the same type of values (expect for #7) and I am ever thankful because developing those habits early in life have been a god send today.
Making friends. I've never looked at making friends for the same reasons you have mentioned, but it makes sense. Just like your hub.
Thank you
Hi everyone. Thanks for your comments. I really appreciate it.
DSE901--Good luck on your job! I hope things turn around too! (This is a case where I'd much rather be wrong than right.)
emohealr--Thanks! This is pretty much just how most of us over 50 (you can't be that old!) were raised, so it's more a case of going back to the old days I guess.
robert--That 'jobless recovery' phrase has been all over the news media and the financial pages. As near as I can tell, what it means is that companies are starting to turn a profit again but continuing to downsize and demand greater productivity. So the corporate bottom line is showing some recovery, but no jobs. I wish, as you say, that there could be some real support for self-employed people and very small businesses so people could opt out of corporate work. The fact that there isn't tells me there's a real fear that if given some choices, LOTS of people would opt out of corporate work.
Dottie & jibberish--I would never presume to tell anyone what to do about their credit card debt, and I know that it hurts you when it comes to getting a job if you have defaults. I did write a hub about unreasonable and ridiculous, invasive job applications. IMO it's abusive to require a drug screen, a medical waiver, a credit check, a background check, and four psychology tests for someone who just wants to drag products across and scanner and bag purchases, but that's what it has come down to.
Debt on credit cards is unsecured, meaning they can't take anything back, they can just harass you for the debt, although there are limits to that too. They can sue you and attach wages or get a judgment against you, but most of the time they don't take it that far--they just sell the debt to a collector who sells it again to another collector and so on. After 6 years, they can't touch you anymore because the statute of limitations runs out on collecting the debt. Yes it ruins your credit rating and yes if they take you to court (which they rarely do but once in awhile it does happen) you may have to file for bankruptcy, but I feel strongly that these banks are charging usurious rates and fees on CC debt.
If you can't pay the debt off they COULD work with you by freezing the card, lowering your interest rate, and helping you make some headway. There's no law that says they have to jack your interest to 29%, slap on hundreds in fees, and jerk you around so the debt just goes up and up no matter what you do, but that's what they do. So I feel like, if you are in a tough spot and its down to survival, screw them. I really do. IMO the banks aren't acting in good faith and haven't been for a long, long time. It's a two way street. Why must the consumer act in good faith when the lender does not? That's my feeling but I'd never force it. It will wreck your credit for sure, that's true.
Duchess--thanks for your comment and all the best to you and your family. :)
Pam,
Another triumphant hub of practical information, as for #7 you know what I think, I think we should all universally default as the first step, to a general strike to bring social reform to this country.
I defaulted on all of my credit cards in 2008. As to the job situation, if your credit score prevented you from getting a job, you would have a good case to bring in civil court. It is not a crime in this country to be poor, and is egregious to discriminate on such a basis as it would be for any other reason.
By design the founding fathers found England's debtors prisons abhorrent and the founding fathers understood how central banking and fractional reserve systems, and compound interest creates debt slaves of all.
I would say #7 should be the first step anyone should consider before anything else. If someone really feels the need to give their money away every month my address is:
Glenn West
POB 1172
Andrews, TX
I take cash, checks, and money orders.
Thank you again for using your power of writing for bettering peoples lives.
TMG
Hi TMG! Thanks for backing me up on #7. You know I agree with you 100%. In Michigan and Illinois bills are being introduced to make credit checks illegal as part of a job application unless the job directly involves handling large sums of cash. It's sad though that that step even has to be taken, and who knows if it will pass.
Myself, I'll not be getting any more jobs at this point no matter what my credit score looks like. I could write about my own decisions and why I made them, but I haven't decided if I want to do that here. I might well write about credit cards though. I agree with you--Let's call a national strike. I'll meet anyone who's interested on the Mall in DC July 4th, 2010. :)
Warren Buffet's got nada on you, Grundy! Laugh! I think you and himself are joined at some mental hip, just in different planes maybe :-)
I like #9 very much, I think I commented before on the increased (as in %1000 increase) bartering activity in many small communities, like blocks of houses, suburbs and such. This young guy would teach a granny to use a computer to email the grandkids and the granny would cook him dinner. A working mother would sew for a younger couple down the block and these would pick up the mother's kids every day from kindergarten. Just incredible good sense, and besides brings on a sense of community and helping each other -- which may become more than necessary in the current state of affairs.
PS -- Love you PS :-)
Hi Elena! Love you too! lol! Seriously I agree about the barter trend. It's great. We've been buying all second hand when we do buy things too, and it's so much more fun to actually get to know people by trading skills. Thanks for the vote of confidence! :)
I just put July 4, 2010 on my Calender, I am nut with way to much time on my hands, so I will see you there.
TMG
I am bookmarking this one, thanks for bringing me back to reality P. I can't believe it, credit checks and health checks to get a job??? Disgusting. And like mentioned, then you work your butt off for 8 bucks an hour.
Can't add much but commentary about #7, I see your point, and yes, the CC companies are allowed to screw us over while we stay enslaved for years and years. I think that it might be wise to completely evaluate your need for good credit before taking that step, and whether or not you want to hassle with credit problems for 6 or 7 years. The best thing to do is pay it off and use it for emergencies.
You're off the grid? Congratulations. If more people did that, we would see beneficial changes, mainly the customer will be able to dictate the terms.
On the job market, the big city and "get a job" mentality have driven the economy to this point, we are all beggars. We all need to become "businessmen", where we trade our time and expertise for goods or money. If we all offered ourselves for work this way, we would stop being treated like slaves. I notice on Elance they try to get you to pump out blog articles for pennies, and I'm thinking, "what, are you stupid? I can do the same thing for myself and make way more money". It just takes time and work and patience, yes?
LOL
Good article - we think alike. This "jobless recovery" is the scariest idea I have heard in a long time.
All good advice, although I hate to say it, but the Swiss banks are in just about as much of a mess as the US banks. They had people demonstrating against the bailouts last year - and I have never heard of Swiss people demonstrating in the streets before.
Hi Alexander--Elance is kind of like the wild, wild west. Once in awhile you an pick up a good project there, but often the work is very poorly paid. Recently its gotten lots more competitive. I just finished a job cleaning up 10 articles that someone wrote on a low, low offer that were INCOHERENT and the buyer had to repost the project. So cheaper isn't always best but not everyone realizes that right off.
Mark--Oh no, now Swiss banks are alos in trouble! lol! Well, I personally have no money to protect, which makes my life easier. I thought Swiss francs were fairly stable, but I will quit thinking that now for sure. Probably the best thing is to stay away from money period these days I guess. Savings accounts--god, that's like throwing your money in the toilet. It's so depressing. I saw a CD ad in the paper not too long ago--1.75% APR. Woo hoo!
Hi, Pam. Yeah, I hate CCs too (#7). I've been a good boy and they still raised my APR to a whopping 23%! WTF! Thank goodness I'm almost done paying it off. I own only 1 credit card anyway.
Another good way to save money, I've found is the following:
DO NOT EAT OUT! No Dunkin' Donuts, Starbucks, or anything fastfood! I by coffee bulk, eat at home and even took up fishing a source of food!
Consignment stores are also a great way to buy things (sundries) for dirt cheap. By doing so, you help out your community, as they split the proceeds 50/50 from the shop owners.
Buy it Bulk--I try buying things in bulk that are practically non-perishable, like laundry detergent, cans of soup, rice, pasta, condiments. The list goes on. Stock up and then you won't have to worry about it for a while.
I have more but this should do for now! Hope I helped and thanks for sharing this, as many will find it useful! Thanks, Pam.
Hi Pam, thanks for your response. It's not so much I don't want to pay my credit card but what irks me is I got caught up in an internet opportunity that sounded good and promising but turned out to be another misadventure that I despise paying for. To be honest with you, I would rather send my monthly payment to you or The Money Guy, LOL!
PG, very good article and advice...However, I have to disagree with number 7...They have us in a pinch there. If we do not pay our credit card bills, it can affect us in obtaining employment...Lets all start writing our congressional representatives on this one; After all, they OK'd this idiotic ruling!
The following link will explain the rules around employers using your credit report for hiring purposes…
http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/al
Hi dohn--Great suggestions. Eating out really is expensive, and usually so much more unhealthy. I heard on the radio this past week this prediction that in the future almost no one will cook, everyone will buy food already prepared. I think that's such a bad idea!
Dottie1--Believe it or not I'm a responsible person, but I just don't think that it's fair to repay at debt ten, twenty or 100 times over. That's not reasonable. It should be illegal IMO. Thanks for your comments!
Nancy--Thanks for that link. A letter writing campaign is a great idea too! Thanks for all your good thoughts. :)
I'm going to start calling your hubs in toto the Pipes of Pam because you are acquiring a very strong and utterly deserved following. And if Buffett is the Sage of Omaha, you surely are the Maven of Michigan!
I say it's time to give the fiery finger (as pictured on my Rage Slaves hub) to the CC companies. They've diddled us until we don't know up from down. It is beyond belief that there havn't been demonstrations in the streets long before this.
I've said for years that Americans should take a page from French students and get out there en masse at the very hint of such troubles. Instead, we duck for cover, crying "I'll be discriminated against if I do this." The bullies (whether schoolyard, czar, dictator, CEO, or government bureaucracy) have understood for eons that fear is by far their greatest weapon - and they're right. We've knuckled under time and again until here we be.
Let's get off our backsides before we're so crippled financially and emotionally (a place I stand on the brink of right now) that we can't fight back. Mail handwritten letters to the President and anyone else you can think of. Include pictures of your family, your pets. Tell your story. Express your outrage. Listen to Pam and others who get it. Kick fear out the backdoor and along with it, the fiends (some of whom masquerade as friends) who are telling us in so many ways that we are beneath their contempt.
My husband is a high energy physicist and when he asked me what I wanted for my birthday I told him a my own backyard nuclear reactor. I want to live off the grid sooo bad. More likely maybe we'll have our own wind turbine some day.
Hi Mindfield--I do think that there's a lot of intimidation coming into play here. This whole idea of creditworthiness is to my mind a means of control. When I was a kid, people didn't use credit. Even buying a house--you needed a mortgage in msot cases but the idea was to pay if off ASAP. People who used department store charges were kind of looked down upon. Now we've been trained to be compliant and complicit in our own financial rape. It's easy for me to be outspoken though because I'm in that 'nothing to lose' at this point category too. I agree about the French--they know how to make noise a lot better than we do!
Nelle--We are not off the grid with electricity, we just want to be. We got off fossil fuels for heat, and we've learned to live without electric when we need to, which is too often. What we need is cheap solar and wind that individual families can buy. We have the technology, it's just that the initial investment is killer. Thanks for your thoughts and good luck on that wind turbine. We have the same dream!
Pam,
I know you find this as much of a coincidence as I do, but the government is the real reason you can't afford solar power. I was a facilities Engineer at the last Semiconductor plant in Orange County before it got moved to China.
Anyway, while I worked there I got called all the time by silicon dealers wanting to buy my scrap and they offered very high prices. I got curious one day and asked them about there business.
I was always curious about business; well he came out and explained the whole thing to me. Essentially, a lot of companies in California used Cogeneration plants.
Cogeneration plants are just where a plant of facility also has its own power generation capabilities (A way to control the rolling blackout problem).
So these guys are pretty much off the grid so to speak, and make no impact on consumer electricity profits and losses. So, the California Air Resource Board got a lot of money to push the solar thing in order to clear up the environment so to speak, so they make it a law that all these businesses had to use solar as a part of their cogeneration schema. This forced them to buy all the excess silicon out there, so they can meet the requirements of 10 percent of their electricity be from Solar.
End result you or I will not be able to acquire said silicon for anything that might look like a reasonable price therefore we as individual will not upset the ENRON profit scheme in place in many states throughout the country.
TMG
TMG--That shocks me not one whit. It is obvious that we are being set up and what's really scary is the grid itself is so messed up and ancient it already goes down all the time. Sometimes I think we are in the verge of another Dark Ages. It's really scary.
There were about four months that I was not paying my credit cards, so I do agree with number seven. That was the first time I ever did that, but other bills come before credit cards. I finally got on a payment plan so I can make smaller payments, but I agree with you about how it is throwing your money down a hole. If I could do it again I would never get a credit card!
Nice informative hub!
As you mentioned investing in gold, silver, swiss franks, land...
I've been investing in property and don't really see prices going up in near future. One might have to sell it on the loss or keep it for a long time? Need to know your comments over this.
Hi, Thanks for making my evening after reading your hub. Your humor and directness made me wish you would be my next door neighbor. I agree with everything that you have said. Perhaps about # 7, people do not realize that the credit card company that gave you credit, that is when you signed the application, in ink, is probably not the company you are paying or trying to pay, or hiding from. There are ways to play with them as well, when you can no longer afford to pay. Pertaining to credit checks, I was given a job to count 1.5 million dollars a day and handle more money each day, and my credit is worse than poor, sure they were Indians, but that did not matter, the non usuage of drugs and a criminal background check were more important. I agree that bartering is a must, and the jobs are gone. A person has to use their own intelligence and create their own job. Thanks for your hub!
Hi Sweetie Pie--I know what you mean! I will never have one again. I do think there should be usury laws.
Utimate Hubber--I think you are right, now is not a good time to invest in property. Land, maybe, but not houses and so forth. If I wasn't living in a house, I'd buy one to live in but not to fix up and rent or to flip. You're right--that would be a losing proposition right now.
Rainbow77-Thanks! I'm glad you got a laugh out of it. I try to keep a sense of humor. It's hard these days though, isn't it? I think the process for getting a job these days has gotten nuts. SOme of these companies put you through the wringer testing every little thing, and yes, you get in a realize they are a bunch of crooks themselves!
These are practical ideas. My grandparents paid cash, grew vegetables, had a fig tree, and he built their house. He was a carpenter. My grandmother canned vegetables from the garden, which was mostly her baby.
Thanks for the tip on bartering sites.
Credit cards have gotten a lot of people in trouble--along with the consumer society concept. It's probably best to pay them off and stop using them.
These are great tips!! Really it is a matter of living within your means and being prepared for a rainy day. We all got too caught up in having the biggest car, biggest house, and latest gadgets and it burned many.
Thanks Erick! Yes I think common sense will be returning to America in the coming years. Thsnkd for stopping by!
In my next life I'm going to do exactly what Colette Dumont says (above) because I've always dreamed of having a fig tree, a man who could work with his hands, and the ability to garden and can. Seriously, it sounds like heaven to me.
Mindfield--I hope you get all those things and so much more, not in your next life but in this one. You never know what's around the corner! Hope you're feeling better these days. Thanks for sharing your idea of heaven. :)
Hi Pam,
Your ideas are old fashioned and I mean that in a good way. It is the way most of our grandparents and parents lived (at least for people of my age).
Regarding #7...prior to credit cards, people were in better shape financially. Now...poor credit can affect being hired; car insurance rates, etc. So my advice to people who still are concerned about things like that would be to go to Consumer Credit Counseling (a free service) and see if they cannot get some of those interest charges waived or reduced and get on a liveable (lowered) repayment schedule to get the darn credit card charges paid off. THEN use only a debit card or cash in the future. Impossible to fall down that same path of indebtedness if one does that. CUT UP THOSE CREDIT CARDS!
Thanks Mussab! :)
Peggy W--Good suggestion! Thanks. You're right, easy credit caused a lot of these problems, and not just for individuals. I appreciate your input.
I'm depressed.
Pay off the house. Ok, give me a minute and I'll be right back and then work on #2. J/K. Great tips.
This hub depressed me. The tone was just so gloomy. I know I'm in a different country so my experience is different - but surely things can't be really that bad? Is it possible that you are consuming too much news and media and it's dragging you down? Someone once told me that the "media uses our heads for a septic tank" and I agree. Have been so much happier not listening to news and just carrying on with my life. Real life without the fearful spin the media put on it, is actually not that bad. I think it's pretty likely that we will have a recovery this year. Recessions never last forever, it's just a question of waiting it out.
Hi--thanks for all your comments. Sure it's possible I'm just looking at the gloomy side and there are really lots of great jobs up here in Michigan and all we really need to do is turn off our TV sets. That works for me! LOL! :)
Pay off your house, best tip there, thanks for sharing. Nice Hub!
I like the idea of making friends, for many different reasons. All the other tips are excellent too.
Now, are you sure you don't want to get into a political spar? Pretty please???:-)!!! MM
Thanks Ambition398!
Mighty Mom--Nah, you have to go to a town hall meeting for that! lol!
Great hub and some great points! I think all of us are feeling the economic changes to a degree but there are ways to lessen the pinch. Some good suggestions here!
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Thanks candledawn & genejockie! I appreciate you both stopping by and also the link. :)
You know Pgrundy....I really really LIKE YOU! You have so much common sense, you are the kind of person that we look back at and think.....she was right about so many things. You should run for office, this country needs your good common sense.
BTW...I agree with you 100% in everything you said on this hub. Especially about not paying off the credit cards, but paying off your house so that you have a roof over your head. Just make sure you don't have too much house and that you can afford the taxes when they come due. If the taxes are too high where you are living..MOVE!
The people that have been living the way you talked about in your hub is the Amish. Right now they are sitting pretty. They SAVE their money and pay CASH for their farms. They have an extensive network of family and friends, and in most cases, they will even help out non Amish neightbors. I have respected the Amish for years, and now I even respect them more. I can tell you...they are not worried about what happens with the economy, and if you live like they do, you can leave the insanity behind too! People can probably get by with one eight of what they are using now...just think about it!
One other thing about the credit cards... What most people do not realize is that they have ALREADY paid off what they bought with those cards, what they continue to pay for is the fees and the interest which I think is totally criminal.
Hopefully the government will step in and make it illegal to have potential employers look at your credit report, and it should also be illegal that insurance companies charge you more because of your credit rating. It is totally wrong and just gives them another reason to hike your rates.
The American consumer is being financially raped over and over in a number of ways that are just vile. Is'nt there laws against loan sharking, things like that?
job well done go blue
Yeah, but ya gotta laugh at how we always get ourselves into another fine mess! I lived in a cardboard box, well, kind of, I actually recently moved back home with mom & dad, but they don't mind. I earn some $ by mowing lawns. Get's me enough cash to pay the Internet bill & a little rent.
But when I did live on the streets it wised me up a big lot! Did you know that at Wal Mart they never check what people nibble on there? You just toss the wrapper behind some boxes and you got a free meal! I also found which garbage cans have the best tossed out food, and which to stay away from. A connoisseur's delight! I think you are a really good writer! I never had a credit card. Are they fun?
Great article. You're very much in tune with what's coming our way. I would add only one thing: If someone is in over their heads on a house, get out from under that mortgage and find a place to rent.
I came across a good tip for stopping over-spending on a credit card. Put it in a food box full of water, then stick it in the freezer. That way you can use it in a genuine emergency, but can't get at it for new clothes etc.
Hi Magnoliazz--Thanks! I feel strongly about credit cards and I think you make a good point about paying them off many times over. Of course, every situation is different but I feel like credit card companies have a double standard--they act in bad faith and feel entitled to do so but expect a good faith response from customers. Then we press that on each other. We need to ditch those cards, shut those places down. I really believe that. Thanks for your supportive comments.
mchebli--Thanks!
Plants and Oils--Great tip. I've heard that one too. Thanks!
Joker Jones--Wow, you've had some experiences! I know there's some movie out where a girl lives in Walmart for quite awhile before anyone even notices. Thanks for sharing your experience and point of view.
Hxprof--Thanks for the comment and the tip on underwater mortgages. I heard on the radio that banks are starting to accept very short payoff to avoid foreclosure. It's getting really, really bad out there. One out of five homeowners is underwater. We don't hear about this enough. It's HUGE.
Very good advice.
Good ideas. Thanks for sharing.
I do think we have to pay our credit cards and other debt, but I won't charge any more. I think many of us have learned our lesson. I totally agree about paying off the house. I pay extra on mine every month and am looking forward to getting rid of that debt. I hope we have a complete economic recovery, but if there isn't, it sounds like you will be ready.
Great Hub.
Cards provide the most expensive form of credit and it is only a cardholder's cash-flow that made that "sustainable". As long as the monthly payment could be made, the pile of debt wasn't seriously considered.
As soon as income drops or dries up from reduced hours or redundancy, the inability to pay the bill causes a problem that can no longer be ignored.
The only way to use a credit card sensibly is to keep note of how much you spend every month, knowing that you can pay the bill in full. Then there is no debt forever mushrooming with outrageous rates of interest.
I am glad I am sitting on almost all ten of these now. I love the way you write¬ and while you asked us not to chime in- many did so I will keep it brief. Gardening is expensive and it takes time- but with time, it can save you a few bucks. Our banks are federally insured and if they fail we all do- it is estimated most small town banks are still stable it is the big banks that over invested in real estate that have been unstable. Running in Swiss will hurt our country not help it.
New jobs are about nonexistent and your right most of the new ones do not pay. I think people need to start realizing if everything is made in China- and we do not manufacture enough products-, it gives us little hope of recovery- so perhaps it is time for US to think of what we are buying when we do. The fallen economy is world wide – but there are countries that have not been hurt- they are countries – filled with savers. This is a thought provoking piece and isn’t it sad that many of us were warning this years ago but no one listened until it busted.
Hi Tiara designs--I would like be wrong about the economy but I don't think so. As you say, industry is gone and what's more, no serious attempt is being made to bring it back. You right about gardening. This year we can't grow mold, it's so dry. The tomatoes and peppers look OK, but the bunnies are eating everything else no matter what we do. Last year was better. The thing is, you can't control the weather, but I do think if nothing else it gives you a better feeling to grow some of your own stuff.
I think the next couple of years will be very difficult. And I agree about the banks. Thanks for your comments and all the best to you.
This page seems really out there. I am also a little nervous about number 7. That really is only going to make your life more stressful, even if the companies that get your money already have plenty to go around.
In reality, that money was never yours in the first place. :P
i like your hub
Pay off my mortgage?? You got $250,000 you can spare me to do that?
Bad tip!
Three month salary in savings? Most people are having a hard time keeping up with paying their monthly basic bills, how do you think they would do that? Of course most of those people aren't reading this because A) They can't afford a computer and internet, and B) If they do have a computer they are busy looking up the latest Nascar results and have never heard of Hubpages.
Don't pay your credit card bills so that everything goes into collection?? Yeah great, you'll never be able to buy anything that requires credit ever again, nor will you ever be able to open another bank account.
Extremely lame tip!
Stop excessive spending should be #8. This country is run by the lowest common denominator which turns out is the under-educated, low income, ignorant, Wal Mart and Nascar loving masses that are in need of constant entertainment and keeping up with the 'latest and greatest' so they feel important.
The lowest common denominator of this country will NEVER change; they will always run out to buy the latest piece of junk that's on TV, they will always love Wal Mart, and they will forever remain ignorant of the fact that they are ignorant.
Nobody reads these comments, though Pam you seem to. Comment or not on mine, makes no difference to me, though for once I wish I could get one single comment on one of my hubs!
=(
Hi darntoothysam--To each his own, I don't expect everyone to agree with me. This is just what I believe. You of course make good points too, and I have no idea how you can pay of quarter of a million dollar mortgage. I would never buy a house that cost that kind of money so that's how I can give advice like that. Also, as to credit cards and never being able to borrow again, my feeling is, GOOD! But again, to each his own. I'm sorry about your lack of comments on your hubs though. I'll be glad to leave you a couple. All the best to you and thanks for commenting. :)
PG,
Lots of excellent advice. I believe #11 is to vote every member of the present government out of office who supports handouts to large corporations and special interest groups instead of lowering taxes on people who create jobs such as small businesses. The tiny rebate check was temporary and a joke.
The OBAMA stimulus package has done nothing to stimulate the economy but instead created tons of wasteful spending on earmarks that he said would not be created under his administration.
Once we vote these morons out of office we might be able to correct some of these destructive practices and job creation will start taking place.
Across the board tax cuts has always helped to create jobs. The current administration is arrogant in refusing to recognize this and is legislating based on a government controls all agenda. They do not care what happens to us as long as the government controls every aspect of our lives.
Bush started the handouts and Obama's "change" policy is 10 times worse than Bush. I guess that was the "change" he ran on.
Very informative list - most people know what they need to do and this is a good reminder for them to apply it. I agree with emohealer to pay it off and pay it forward!
PG,
Great hub! I touched on this issue...just barely last week on my blog. I firmly believe that #'s 5 and 9 are the most important.
When it comes to finding multiple sources of income(#5)One would do best if they went after one of the following:
1. do for yourself what your doing for corporate america/your boss. I.E. if your an accountant, then do taxes, estate planning for friends, family, neighbors. If your a software engineer help out with websites, trouble shooting computers, upgrades, etc.
2. If you dont have a trade or craft, FIND ONE. These are the easiest things to barter and network with. Things as simple as tire repair, auto windshield repair are far from rocket science but will be used more and more as even the most die hard spend thrifts are forced to tighten the purse strings. Find a local craftsman and offer to help with general help/cleaning, etc in exchange for training.
3. BUY LOCAL, when you do this, you are helping yourself. Its hard to play hardball with someone you know. Walmart is nice, but lets be honest, they don't know you and really could care less about you...other than the size of your wallet.
4. DO NOT LIMIT your definition of "other sources of Income" to jobs that pay in normal terms, "MONEY". Money is NOT REAL! Its only worth what someone is willing to give for it. As we all know our dollar doesn't look so valuable at the moment.
On #9, one can see that if #5 is executed properly, directly benifits one's batering possition. You have to have something to offer. Whats offered has to have value and hopefully mass appeal.
As far as #7 goes, I have been off the credit CRACK Cards for a year now. What I did was put them on the back burner until I got the rest of my financial house in order. Sure they sold off the debt two or three times(makes the ammount go up). Sure they harrased me. Sure my insurance went up. But guess what in the end I paid them off for less than what they originally asked. It was a matter of principal for me.
MAKE DO OR DO WITHOUT!!!
Dear darntoothysam, You made some good points,,,there really are a lot of people out there who all they think about is Nascar, but YOU my friend are also ignorant in some ways!
Do you really need a 250,000.00 home? Do you have 10 kids and just need the room, or maybe you are taking care of your parents and grandparents? Please don't tell me that you and your wife and kids need ALL that house all to yourself...that's just plain greed.
Actually when people like you get into trouble and can't make their house payment, I don't feel too sorry for them. You complain that some people cannot stop buying junk from Wal Mart, but you are probably no better, you just buy more expensive junk that you do not need, and probably charge it at that.
If you would actually read the hub and posts through you would understand the point that is trying to be made here, and that is we need to look at money and debt in a different way. We are trying to tell people to pay off your house and get a place to live, and then don't go into debt again.
AS for not paying your credit cards,if you chose not to pay your cards, within 6-7 years, all the negative comments are taken off your account. This is an option only for those who have no other way out, like it they are sick or disabled.
Another point that we are trying to get across here is that cc companies are criminal, and we should all wise up and not play that game any longer. Credit cards have a lot to do with why we are in this financial mess.
It is the "buy now, pay later" mentality that is no longer working out for us.
Everyone's financial problems are different, but some things add up in everyone's situation as being wrong, and that is paying 29% PLUS interest on credit cards. This is financial suicide, and if you want to continue playing that game, don't expect much sympathy.
You probably have a harder time living within you means than those people you think you are better than....
We have a great chance to learn from these mistakes and not repeat them again. Going further and further into debt is not the answer here.
Very, very interesting thoughts... kind of radical, but mostly true. Thank you for sharing your views.
I can see that many people are talking about independent electricity. But is it the most important thing for survival?
Food and water are much more important. Having land to grow your own food and having a water source like a well thats what necessary for surviving in general.
Very good hub! This helps me adjust everything. I let my wife read it too and she took some notes. Very good keepem coming.
Hi Pam, thanks for the reply and the comment on my hub. I was sort of all over the place in that comment above, sorry for being so negative! =)
Everybody is different that's for sure. I wish I could get away from credit completely but I don't see it happening.
Hi darntoothysam--No problem. I know everybody isn't going to agree on everything here. Thanks for stopping by and sharing how you feel about it. :)
it's nice. i enjoy it
Interesting thought. I'm sure working on paying off the house.
Great Hub, you are sharing interesting topics..
Thanks.
what a nice hub .keep it up
Hi Pam, thanks for the reply and the comment on my hub. I was sort of all over the place in that comment above, sorry for being so negative! =)
Your number 1 is my number 1, Pam. Debt used to be fashionable, now it's gone the way of Krystal Carrington's shoulder pads!
Hi Tim--I think that is so true, about helping people. Right now there is this meanness afoot in the land, but I'm hoping it will pass. I do see a parallel trend that is more cooperative and more local, and I'm hoping that's the one that wins out. Thanks for your thoughts. :)
Excellent points, both entertaining and informative. You are so right-we should just go write something somewhere.
This is an interesting take, I agree with many of our recession-proof ideas. This article reminds me of a blog I occasionally browse that's very dooms-day-ish in tone -I don't think I can post the link here b/c it has a naughty word in it :)
Grea hub! maybe these hard times will make everyone a bit more humble.
I my opinion, Spending money is a good way to proof your life.
Why don't you refuse that?
Excellent hub. You make some great points and have a very refreshing writing style.I'm very interested in your suggestion about investing in Swiss francs. I wrote a hub on the recession after watching Suze Orman on Oprah. What's your take on Suze?
I really like the way you think. In the end, it all comes down to common sense, but it seems a lot of people out there just try to makes things more complicated, and that takes people off the path they were originally set on and was probably right. I don't know, that's just what I think.
I love your hub and I would love to get off the grid. Is that possible when you live in a rental?
Live simply. I like it. I recently met a Billionaire (see my hub).
William R. Wilson says:
4 months ago
I agree with all this except maybe number 7. I just saw an article in the paper today about credit checks being used to screen people for jobs, and I have a feeling that I have been turned down for a few because of my credit. My insurance company also told me that they charge me a higher rate because of my credit score. So, while I am tempted every month to just tell my credit card company to go to hell, good credit is about more than just borrowing money. I would change number 7 to "stop buying on credit, and pay your credit cards off ASAP."
Of course, depending on where you are in your life, just stopping payment altogether might be a better option. It's not for me.