This is just my view of the economy as someone who tries to live within our means. Our retirement funds are down about 30%, gas and medical expenses are up over 40% and our net worth is about what it was about 4 years ago. Yet I feel that we are doing quite well, we live in a 40 year old ranch that is very comfortable. We have moved down stairs to the mother-in-law apartment and our parents in their 90's have main floor bed room, den and master bath.
The company that I retired from has dropped our live insurance, dental insurance and started phasing out the health insurance starting in 09. On the flip side, our daughter is married and they are doing well, my retirement is available after my death, so the insurance is not so critical. The dental insurance did not pay for that much anyway so I doubt that we will miss it. As for the health insurance, for now our increase in social security is covering the added premium for 2009.
A year ago I was asked to return to work part time for someone I work with years ago so the added income has helped. We are completely out of debt and pay all the credit card bills off each month. I have started a savings account for a replacement auto due in about four years.
So all things considered in this time of tough economy I believe that we are weathering the storm just fine.
Housing crunch;
For years we have watched the building boom around us and wondered where these people were getting all the money to buy these huge houses. Not only could we not afford one but did not want to live in such a big house knowing how much cleaning and up-keep was involved. We instead opted for a small log cabin along a river in north Georgia.
A friend of ours who was a building contractor in the 80's told me that the only way to make money as a contractor was to build the biggest houses that the market would handle. At the same time congress and other groups were pressuring loan companies to lower the qualifications for home buyers to the point that they could not afford to pay for them.
I experienced this first hand when I sold a rental house in 2007 just as the housing crunch was starting and had already hit in Florida. The buyers had no problem getting a zero down loan and even increased the purchase price and loan for cash to furnish it. I just could not believe what I was seeing. Now I wonder if they have let it go back to the lender. We need smaller homes and time for the need for large homes to catch up with the surplus.
Jobs;
Skilled labor is still in demand. Work is always available for someone who is willing to work hard and has the necessary skills. My son-in-law is always looking for good people to work in his company that he can count on to still be on the job after several years. I recently referred a friend's brother to him for work. He delayed hiring him until he could pass the drug test and was doing well until he decided to move out of state. My son-in-law took the loss in stride stating that it usually takes over a year before a new hire starts to show a profit for the company. People have been taught by our society that it is OK to treat others with disregard and than only of them self. Employers are viewed as evil and trying to take advantage of the workers instead of someone who looks after and provides income for others. Is in now wonder companies take the jobs to areas where they are appreciated.
Retirement;
Some are starting to save now for retirement and all you hear on the news is that we are not spending enough. The government is now throwing money at banks in an effort to encourage more loans instead of saving. We all know that the social security will not be enough to retire on by itself, yet we are not saving to meet the upcoming need. I have another friend who has not even paid the minimum into the social security system to qualify, works odd jobs with no benefits and is not even thinking about the future. We truly live for the now and not the future.
Where will it all end;
The government is heading toward paying all of our debts, covering all of our medical cost, bailing out all the failing companies with high wages and poor products. The feeling is now that we should not worry as the government will take care of us.
As far as the economy is concerned, for those of us who have lived within our means and not over extended our finances, we should come out of this just fine. But the nation overall will remain in trouble and drift toward a more social state, with inflation hurting us all until we wake up and work our way out of these troubled times.
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