CONFESSIONS OF A MIDDLE CLASS RECESSION VICTIM
AN OPEN MIND MEANS SUCCESS
For some reason, the word “surviving” has a different meaning in our country today. About 10 years ago, surviving meant being able to overcome a financial burden and still live within the American parameters: providing the basic needs to our family, and being able to save some money for at least a family summer vacation. Not anymore! Gradually, our economy has deteriorated to the point where we are now being compared to a third world country.
The ones lucky enough to keep a roof over their head, and a job, live in continuous fear, as a part of the “what happens if” syndrome. It is now very common for a single parent to have two or three jobs in order to pay the bills, and most of us already went through all the savings we had for the future in order to survive. The ones who lost it all who are still out there collecting unemployment, forming long lines for an interview for a position paying minimum wage, and living off of the money they once saved for their child's college or their retirement. Some of them live now in cheap motels because they lost their homes, or even on the streets. It is no longer an unusual occurrence to see entire families sleeping in tents at public parks, or in the backwoods of their town. And YES! This is happening right here at home, and maybe even to people we know.
The truth is that even if we have a job, most of us won't be able to survive once we retire. Perhaps that's why a large number of Americans are immigrating overseas everyday to where it is cheaper to live, because our “crashed” dollars are still worth something. However, if we consider the uncertain future of Social Security, immigrating to an unfamiliar country, and trusting such unstable funds, could eventually turn into a real nightmare.
Despite this fear, Americans, around the world have continued turning back their American passports, renouncing their American citizenship forever, just to escape from the ferocity of our tax system.
THE FEW PATRIOTS LEFT
History shows that during the worst potential crisis in America, economical growth might still proceed uninterrupted. Unemployment has always had two sides: It devastates entire families, but it also nourishes creativity. It is not very difficult to see this through your own eyes. Not having to work everyday on a tight schedule translates into more free time to think, and therefore into the opportunity to come up with new revenue-raking ideas. Some of the biggest Fortune 500 companies were born during recessions. And some of the most consumed products in America today were developed from someone's desperate idea to make money during recessive times: ketchup, meals-to-go, baking soda, basketballs, salad dressing, and even Coca-Cola, which initially was created for medicinal purposes.
There are two ways to turn a great idea into a profitable one: Taking out a loan, or the old-fashioned way: Selling something to family and friends until it is necessary to register it because the business grew too fast. Either way, the good old credit system, is pretty much ruined for most Americans. The majority of us probably have some kind of boo-boo on our credit report, and therefore our credit score is not very desirable for most banks. It's funny how these are the same banks who once "crucified" American people when the mortgage industry collapsed, and the same ones who were bailed out by the Government, only for the American people to learn later on that the money went straight to juicy bonuses for the CEO's. One of them alone was for $700 billion dollars!
Where am I going with all this? I'm fixing to make a point, I promise!
ESCAPING THE “COLLECTIVE BORG” MENTALITY
It is not a secret that we are all being traced 24/7. Our credit card statements reveals where we went, what we did, what we ate, and how we live. There is a reason why absolutely everything is paid now via credit card, and why most companies, including insurance companies, almost demand direct debit from our checking accounts, otherwise the “premiums” go up. Control means power, and power translates into limiting the access of success to others. Based on this concept, a couple friends of mine just closed their bank accounts and canceled their direct deposit. Now they manage cash only, and if they cannot afford to pay for something in cash right away, then they just wait until they've gathered the entire amount. Saving. Just like in the good old days! When the word “credit” meant a verbal agreement between two people, based on plain honesty.
When my friend got laid-off after working for fifteen years in the same company, going to the meetings and being a team player, working some seventy hours a week (sacrificing holidays and weekends), and getting paid fifteen dollars per hour, he realized how terribly he had wasted his time all those years. Like most of us, the collective mindset was engraved in his mind since he started working there, while he loyally wore the company's shirt, even during his time off. He did deal with the customers just like as if the company's money was his own, even making some enemies sometimes, and having to applaud the CEO's every year during the company's party, when they announced how the profit statistics went up again.
He was advised one morning via telephone, not to come to work anymore. No explanation, no more paychecks. Ever since, he stayed home in a deep depression, wondering who to believe anymore.
We are taught all of our lives to work for a living and to “be a part” of something. We are convinced as soon as we leave school, that a great future is awaiting ahead of us! No one tells us that the best way to make money is saving, and that by starting our own business we would never be “disposed” of by someone else.
However, let's face it! Receiving a steady, regular paycheck is not only nice, but it also allows us to have that peace of mind knowing we can count on our money on regular basis. We don't have to worry whether to withhold the taxes because the company we work for does this for us too. About twenty years ago, most Americans used to rely on getting a good job and living happily ever after. Retirement was a definite part of life, and was just a matter of waiting around doing the same exact thing every day until the end of your “working journal” arrived.
Not anymore! Retirement for most us today means mortification, worrying, a fear we carry in the back of our mind on a constant basis. Something we prefer not to discuss if possible, because it makes us feel uneasy. Unknowing if it's going to be there when we get to that point in life. According to expert economists, this off-and-on recession has affected the retirement of three generations already. The reason why is that future retirees have been getting dipping into their retirement funds early to survive. Withdrawing large amounts from these retirement funds, not only reducing the average amount they will receive per month, but is also penalized an average 10% for early disbursement.
It just makes you wonder, is it really worth it to just wait around until we croak, relying only on our retirement funds?
AMERICA WAS FUNDED BY SELF-EMPLOYED PIONEERS
Maybe our biggest mistake has been relying on outsourced companies and products, instead of concentrating on our homegrown industries. This uncontrollable importation has invaded our market for years, reducing quality, but filling the pockets of a few big wig bosses. So many small entrepreneurs have failed through the years, eventually going back to their regular jobs, just because they did not have the support they needed from the government. They were choked out by ridiculous taxes, licenses, permits, violations and snuffed out by big corporations without a chance.
They were drowned beneath the surface of the economy, held under until they stopped kicking.
However, this is some kind of... “understandable”, because small entrepreneurs are not really “interesting” to the elite group who always makes a profit out of these deals. They are not interested to help them grow their businesses, because their “sight” is focused somewhere else, searching for the “big bucks”.
The truth is that the middle class of this country, was the one who took the reins of the economy during past recessions, creating businesses and jobs for others. Maybe they need to remember this and start supporting more the “Made in America” label. This would encourage even the ones who still receive a paycheck from someone else. Starting a small business could even be more economically significant than expecting a retirement income in an economy as unstable as ours. In other words, leaving our old years in the hands of a third party, is as risky as crossing the road with our eyes closed.
My point? Everyone has some kind of talent: cooking, writing, artistic creations, language, and other skills which could mean extra income. Maybe not to become a millionaire, but enough to create an additional monthly income. The same friend I mentioned above, took advantage of his handy-man skills and started doing small jobs around his neighborhood. Today, he has a small truck, and he gets calls all the time, leaving him a profit, after taxes, enough to live on. His wife was always good making homemade fruit marmalade and jellies, and when he lost his job, it was also a way to keep herself busy, while she had to put up with his depressive moods. Now, she sells her products to a local grocery store, profiting more than enough to survive. No more working across town, spending gas and parking, no more paying day care, and no more wearing anyone else's logo on their shirt, except for their own. Honestly, all they needed to start their businesses was time and patience.
HOW TO START
First determine what to do. There is “always” something to do as a side job: baking cookies, a family business mowing yards, or cleaning windows, walking the dogs in the neighborhood, or even babysitting. Some of these jobs might sound like “teenager jobs”, but saving this extra money could lead to capitalize our future project. My friend's wife, for example, used to give away her fruit jellies to family and friends for Christmas, until she realized that her product was good enough, to be sold to other people too.
If you have a full time job, keep it! But don't waste the opportunity to make extra dollars on the side if you can. It pays along the way, and you never know! It might become your only way to make money in a future time. Saving that second income, will also make you feel a little bit more confident.
Study! Take advantage of all those scholarships and grants out there, just waiting for you to apply. Inquire about how to fill out a FAFSA . I did, and I was approved for 20,000 for the school year! I'll start this fall, and I feel so good with myself now. Inquire about it, you won't regret it.
During recession there are also some factors to be taken in consideration, here are a few of them:
Deescalate! If you only have one income now, and you cannot refinance your mortgage due to credit standards, consider the possibility of renting your property to someone else, and let the mortgage be paid with the rent, then move to a more affordable place for you to live.
Reduce your expenses. If you are drowned in credit card debts, try seeking a CCC (Consumer Credit Counseling) to see the possibility of consolidating all your credit card debt, in one lower monthly payment. Most of these Counseling agencies are non profit, and they can help you organize your finances. Eliminate the “must have” expenses such as: cable, an extra car payment, or switch to a cheaper cellular phone plan. Increase your grocery shopping, instead of eating out every weekend. A suggestion: Renting a movie from Red box, and getting some pop-corn, is always cheaper than going to the movie theater.
Start rationalizing your electricity: do laundry only twice a week, grill more instead of baking, and DO NOT let the water running, if you are not using it. Reduce the sprinklers time too.
If you work faraway from home, try to ride on the city bus instead of paying all that money on gas and parking. You will be amazed of the big savings! And if you are used to go out at your lunch time, try bringing food from home instead.
If you are a coffee drinker, buy a thermos. They are cheap and they can hold up to 3 cups of coffee, depending on the size, of course. If you add the cost of each cup of coffee you pay per day, you won't believe how much you are spending per month!
If you are a "clothes freak", try checking the Thrift stores more often. You might find a lot of good brands for you and the kids, but spending half of what you usually spend in a department store.
In reference to the food, eat well but try to plan your menus ahead of time. This allows you to organize your budget a little bit better. Those short continuous trips to the grocery store, means you are probably buying groceries you really don't need. Shop for groceries twice a month, and label your meat by date. One more thing NEVER go grocery shopping with an empty stomach, chances are you'll find yourself overspending.
You still want to take your family for a summer vacation? Great! Start exploring the local parks in your area, most of them have cabins and camping areas, where you and your family can stay without paying a fortune! Get together with other families, and you will be able to reduce the cost even more.
One more thing, all the money you will save, save it with a plan, so you won't be tempted to spend it. Think about a family business maybe (other cultures succeed in business because they work together), or keep it for your retirement. If you are disciplined enough with your money, you won't even need to keep it in a bank. Buy yourself a good safe, like in the good old times, and forget that money is there, until you really need it.
Times have changed, indeed, so we have to adapt to these changes smartly, surviving but not losing hope. Having a goal in life is what makes us different from other species. Have a plan, get off the collective mind, and start thinking like our ancestors did: with perspective.