Money Matters

We had a business years ago and it dried up. I had over $25,000 in credit card debt alone and other unpaid bills that had to be cleaned up. We sold it and bought this property we are on now. We paid 75,000 for it and built a 2 story garage (the one that has my pool table upstairs). There was hardley any room to turn a vehicle around, no lawn and not one stinking flower except hens and chicks, trillium erectum and rocks even Bill wouldnt like. Its worth more than what we bought it for now as everthing is expanded.

Dh will be 63 in 3 years. I will be 52 soon. Everything we got is bought and paid for. He has 1 credit card with a 500 dollar limit. Heck I couldnt get a card if I tried. We have hardley any money saved. We live paycheck to paycheck. I am looking for a job that I would like to do and thats plants at HD or Lowes. Its hard to live on 1 income but we do.

Delivered pizza ???? HA HA HA that would be royalty as we live too far out they wont deliver, and if we get it once a month that is pushing it. DH & I dont buy new clothes or bascially anything that is not "NEEDED" other then beer and cigs. That dont mean paint or something that you need to do to make your home better or keep it up to par.

When it gets where DH dont/cant work, I would like to sell everthing we own. Move south where the property taxes are cheaper. Take the money that we have from selling everythig and buy a income rental property and be our own boss.

So is it money or happiness? I will take happiness anyday.

Happiness is def more important imo.

When the put those lists out about how to cut costs I laughed because I already do all of them.
We don't have cable
no car payments
always buy on sale
This coming vaca is the first one in 8 years!
We hardly go out to eat.
Hubby brings lunch and if he has to leave early will sometimes even bring breakfast.
I did cut back the past couple years on plant purchases.

OMG Jen, cut back on plant purchases! There are some priorities in life. LOL Holly
We have cut back in some areas it is easier now that our children are grown. It was different when the children were younger. Not that we felt that we had to shower them with things but there were always extra expenses. Got to run, maybe more later. Holly

We bought our house in 2004 before the market peak, and put down 33% to avoid a jumbo loan (crazy NYC prices, but it's still worth more than we paid for it). We declined the HELOC and the credit cards which the bank offered.
Jen: I'm with you on the savings rate: it's fiscally responsible to have at least 2 years' worth of expenses in cash/CDs/money market accounts.
We have no debt except the mortgage
Max out our 401k plans, which are split between traditional and a new Roth 401k
Brown-bag our lunches almost every day
1 used car to share, paid cash for it (dealer didn't like that we refused to borrow)
Pay credit cards in full every month
Stick to a weekly shopping list
Rarely eat out
Budget $10K for 1 home-improvement project each year
Save as much as possible
DH is not a gardener, and he grumbles about what I spend on plants, so I remind him the perennials are a capital improvement ;)

Brown-bag?? - not a cooler? I wouldnt pay for brown bags or send hubby off with a plastic bag.

Interesting perspectives posted here. I wish I had put a lot more thought into my finances when I first started working 25+ years ago. I've always lived within my means, and have done the basic things like contributing the max to retirement and not carrying credit card debt, but I was never exactly frugal until a few years ago. When the housing market in Loudoun County took the huge nose dive, it really affected my mental comfort zone. It is amazing how much less spending I've done by simply cutting back - bag lunches, minimizing dinner out, using netflix vs DirecTV movie packages, car pooling to work, etc., etc., etc... Even the amount I was spending on sodas from the vending machine really added up. My savings account has never been better. I could kick myself for not doing this sooner - $s would have been there to be completely debt free by now if I had. Terri

Good to hear, Terri. We all could have saved more. Every bit counts!

Moving to bigger picture economics, how pathetic is is that we are being (rightly) lectured by China, a communist country, about our debt and cleaning up our financial house?!!! Never thought it would come to this.

Probably everyone already knows this, but this is one specific step I took to reduce years & $s off my traditional 30 year mortgage. Most lenders have the option to pay half of your monthly obligation amount every two weeks vs your entire amount once a month. This does two things - one, you are reducing your balance every 14 days vs every 30 days, and second, you get an extra payment in a year. Both these things reduce the interest owed - over the long run, it can reduce your 30 year mortgage by years (7 or 8 in my case). Huge overall savings, without extra $s (except for the extra payment) out of pocket. If you can afford to add any amount over and above the monthly obligation, even better... Terri

Yes - good tip.

Someone said it - oh, it was Michaela - we were poor and lived poor before the crash so it was no different after. Then DH got a promotion! Totally unexpected. One big difference is we're able to help with college costs and give more lasting, fun gifts (Legos instead of just PJs) to the grandkids. We're planning a honeymoon in Spain - all with savings, never borrowed!

RE: China
- I don't think it's pathetic at all, I think it's an eye opener! Capitalism is not the only economic base that works: Decentralization, mercantilism, free market, state property, even environmentalism all are economic strategies that work with their own advantages and disadvantages. To think that any one is over and above all the rest is silly. True the politics that come with each economy may not be the most pleasant and human rights may be compromised, but they have been and still are considered acceptable casualties depending on the country you live in, for the sake of the country's economic health.

-For example, I heard something shocking the other day on the radio, one senator, I forgot the state he was from, said it was just terrible about professionals & highly skilled workers that were displaced and could not find a job now, "but that's what welfare is for"! - horrible way of looking at things IMO, but the 'bottom line is the bottom line'......

Didn't say capitalism was the only system that works, but it IS pathetic that we've gotten so irresponsible (has nothing to do with capitalism - but with a loss of backbone) that China is now more fiscally conscious. And as a matter of fact and history, China only turned their backward system around when they began to adopt free market reforms.

What I do find disturbing is that many of our corporations and banks have sold out to foreign interests... and 'their' interest is primarily their own if you get my drift, ...you don't need military might to destroy a country, you can do it economically and also change the country's politics by default...

Our government has sold out to foreign interests. Check who owns our debt.

... I Know. :(

The free trade agreements made in the 90's have accelerated the loss of jobs here and made companies look overseas for workers because of the inequities of the labor market. NAFTA and the WTO were supposed to be this great boon for this country (remember the debate about NAFTA between Gore and Ross Perot on Larry King?? Perot was against it.). Hasn't exactly turned out that way.

This outsourcing is the worse... if you call cust service for some of these big companies/ banks, you get India!!

"This outsourcing is the worse... if you call cust service for some of these big companies/ banks, you get India!!"

Yeah that is so true! You call cust service of certain online garden retailers and you get a rich Indian accent. You ask them if how sure they are if the company has a certain plant in stock and they'll just tell you "my computer says so". And I'll be like saying, "how would you know - you're in India, the greenhouse is miles and miles away from you."

I can understand electronic and big businesses to outsource their cust service, But online garden retailers that sell live plants.......gimme a break!

i do not think you should sign up for the twice monthly payment plan - you can do that yourself and not get into a missed payment situation if you can't later on.

Right---my DH did that with our mortgage--he also did that with his truck payment---which was bought used----my DH never bought a new car or truck in his whole life---I did when I was working, but it's used purchases now.

RE China:

I read somewhere recently (don't remember the source) that the main reason China's citizens have a high personal savings rate (around 30%) is because they have no health insurance. Anyone who gets sick must pay out of pocket, and therefore families must save a lot to pay for doctors/medicine/hospitalization. If China offered national or private insurance, their savings rate would probably drop.

It's still embarrassing that China is (rightly) criticizing the U.S. for our overall poor fiscal management.

china is still third world in many parts of the country.

robin i have not bought a new car either - and i run them into the ground until the repairs start piling up - usually around 200K miles - a car is just not that important to me as long as it runs

Bill - I'm thinking you could get a good deal on a Hummer now that they are going away......just think what you could carry around - rockswise - in the back of one of those things?

Interesting thread, everyone! Now that we have been retired for a bit over 3 years, I can add 2 things. Yes, you will have to cut back on things, but you can also get creative. We used to go out to dinner a lot when both of us were working long days, and now we opt to go out to lunch occasionally instead, especially when we have lots of errands to do on one day. Lunches and breakfasts are much less expensive than dinner. When you aren't working, you don't need nearly as many clothes, so there's a good savings there. I don't carry a balance on credit cards and choose to do home improvements that are lasting instead of taking trips beyond our necessary trips north and south. We are fortunate to have traveled quite a bit already, so now I look for long term benefits when I spend money. We live a rather simple life, gardening, walking, reading and going to only a few plays, concerts, Red Sox Spring Training games, etc. each year.

The second thing I'll say is that the adjustment to living on much less isn't as hard as you'd think. You just adjust and have a good attitude about it. I have no need to impress anyone with "things" we have, or to feel bad about something we don't have, so we just enjoy the simple things and spending time together. There's way too much pressure on people to meet other people's expectations. We don't go there. Our routine might bore some people to death, but it works for us. Some of my favorite people on earth to spend time with have character, humor and kindness instead of material wealth and the need to have things. Just give me a few pretty plants and some moisture control Miracle Gro Soil, and I'm pretty much all set. If I buy them on clearance at HD for a song, that's even better. LOL

Just don't wait too long for fear that you won't have enough to live on. You'll be fine....just do it! How you look at things is what matters. When you confuse your wants and your needs, you probably don't have the right attitude to make it work and be happy. We are very fortunate to have spent so many years saving to have our two homes in retirement, so now we just try to keep them from falling down and we are happy. We live on about 40% of what we were making in our jobs, and we're doing ok so far.....That could change in a heartbeat, but you just do your best and say thanks for all the blessings.....and I don't mean "things".

Good advice, Louise.

Victorgardener what a great subject. ( peaking in from Arizona!) We always have lived below our means even when I was told, " you can't take it with you Linda" by friends that thought I was too frugal. We always paid cash for everything except our home but made it a point to pay an extra 100-200 a month on the principal . We had a 401-K and IRA's as well as Cds and savings. People sadly seem to confuse wants with needs. My husband worked way longer then needed before collecting s/s and was fortunate to have a good pension from UPS. We never felt deprived by our frugality and today we are comfortable, not rich, but debt free. However, it is very frustrating that interest rates are so low for savers. It seems like those that did not cause the economic problems, by staying out of debt, have no way to make a good return on money that they were careful to save. Interest rates are barely above 0 in alot of banks! Hopefully this crisis in our economy is teaching people to put away the credit cards and live below their means

That's true, quiet. Low rates are nice for getting loans, but not for returns on savings, cd's, etc. Of course, we're told that there is very low inflation, which is nice if true.

I do not understand how they can say inflation is low. Here the rates on water, cable, power have all gone up this year and soon if the voters approve it a 1% additional state sales tax will be implemented. They are trying to also get the voters to approve a $12.00 addition to our car registration to pay for parks and rest stops that have been closed because this state is broke. Our school distict is asking for a 15% override which will of course raise our property taxes again. Here very few people seem to vote and the ones that do always seem to want higher taxes. Why should the majority have to pay higher property taxes when these laws are voted in with under 10% of people voting? There is definitely inflation here!

I know. That's why I said 'we're told', because I don't see it. Everything keeps going up for me!

I enjoyed very much reading this thread! Have a nice weekend! Linda

You too!

louise very well said and i agree completely - i watch my in-laws and pray that will have close to the life they have when we get older - they do not garden except for the weeding of our veggy garden which i initially built for my FIL - they eat out one meal a day - usually breakfast or lunch and the occasional big dinner and we will join them every month or so.

oh and there favorite jp maple is the autumn moon maple they see as they walk to the veggy garden - unless it is spring and then it is the shirazz:)

This message was edited Feb 27, 2010 11:25 AM

Same here - I pray my wife is nothing like my MIL when we retire. ^_^

Good advice, folks----my DH gets a COLA raise every year, but when I retired, the COLA has to be a certain %...I can see many things rising in price, but I'll never get an increase anywhere near where it should be.

My wife and I always assumed we would not even get SS. We figure whatever we do get will just be a 'bonus'.

Here is the bottom line regarding outsourcing of jobs. Unless we, as consumers, are willing to pay higher prices for products made by Americans in order to assure that all members of our communities have an opportunity for decent paying full employment - then there is no chance of reversing outsourcing of jobs.

Unless the greater part of the population comes to realize we are all in this together, and we are willing to spend a few extra pennies to give a kid a job pumping gasoline, or are prepared to have one plasma tv - made in America (instead of a tv in every room), then nothing will change.

In the 1950s, almost everything the average American family owned was made in America. It cost more as a percent of income, and people owned less - but the experience of the Depression gave a generation the desire to ensure full employment. But most of us want LOTS of stuff and CHEAP prices - and the standard for "making it" has increased dramatically.

So what about it? How many are prepared to live with less, and pay more for it, in order to ensure that a stranger has a job and a decent wage? I am betting that most people will put their self interest ahead of the collective interest - even if, in the long run, that strategy hurts everyone.

outsourcing of jobs has gone on in one way or another since the beginning of man - what you suggest will never happen nor should it in a capitalistic society based on economics - which breeds competition which means new and better products/services - personally i will pay more for a quality product that will last - equal or similar product i will go with the lower price unless their is a difference is service.

It's simply not that simple, Michaela, though I do agree that it will never happen. It's not that simple because once it's a global economy, there's no going back, so it really has nothing to do with paying more and doing with less to insure American jobs. Companies compete with other companies all around the globe. So company X in country Z will look to lower its costs by using any resources anywhere. Why? Not necessarily because they are greedy, but because they will simply go out of business if they don't. Simple as that.

And by the way, economists for decades considered 5% unemployment as full employment. Well, for a decent chunk of the 90's and '00s, we had unemployment BELOW that - after outsourcing and the global economy.

We simply do not even have the capacity to produce many products here that we now purchase overseas. You don't just dial that up.

This message was edited Feb 27, 2010 10:40 PM

Very important to note that in this current brutal recession, unemployment for those without a college degree was well over 10%, and under 5% for those with. For those with degrees in certain areas as engineering, other technology and some sectors of healthcare, it was even lower.