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Are you changing your behavior in response to current events?

post #1 of 432
9/23/08 at 7:22pm
Thread Starter 
The fears of a tumbling economy are inescapable from the news and office conversations. I've thought about whether I should pro-actively change my behavior, to conserve more cash in the event of tighter times ahead.

But so far, I'm not changing my behavior -- I'm still hoping to build a deck next year for my house and maybe get a new TV.

How about you? Is the news practical -- are you changing your spending habits because of current events?
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post #2 of 432
9/23/08 at 8:11pm

Re: Are you changing your behavior in response to current events?

I would like to change my spending habits, but these habits are hard to break right now.

btw this is very similar to the "just gave myself a $6000 raise" topic.
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post #3 of 432
9/23/08 at 11:18pm

Re: Are you changing your behavior in response to current events?

Racking up debt would be a bad idea, but if you have enough cash reserves to handle a typical unemployment period, there's no point in cutting back on non-credit spending.

Cash flow is important to help a struggling economy. If people don't spend money, businesses lose revenue, creating job cuts. Then people don't have money to spend, so businesses lose revenue, creating job cuts....except in the credit industry, but that's part of the problem.
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post #4 of 432
9/24/08 at 5:11am

Re: Are you changing your behavior in response to current events?

YES. However, my spending habits changed last year in February. I have cut back on many things that I use to do such as movies, eating out, books, music and so on.

I just don't have the money to spare on extra stuff right now and I can only afford to buy neccessities. I realize that cash flow is good for the economy, but when you just don't have the funds or means, it makes it hard to put money back into the economy.

Where I live, movie theaters and restaurants are really struggling. One theater here recently shut down because they were just not getting enough customers.
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post #5 of 432
9/24/08 at 6:10am

Re: Are you changing your behavior in response to current events?

I finally have both my cars paid off and with less than 100,000 miles on each, I don't have any plans on buying a new one. I work for an automotive supplier and our production is 50% of what it was 2 years ago. We have laid off and went from working 24/7 days to 24/5 days per week. It looks like further cutbacks early next year. So my spending habits have been cut back some and I am not considering any large ones in the future.

While they are buying out bad debits on wall street, I think they should expand the program and have a national debit forgiveness day! Say as of 9/24/08 ANY debit that ANYONE owes is erased!! That would free up trillions of dollars that people would spend and boost the overall economy. Instead of everyone hurting to bail out a few, a few would hurt to bail out everyone.
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post #6 of 432
9/24/08 at 6:42am

Re: Are you changing your behavior in response to current events?

It may sound bolshevik, but I'm willing to give Drobbins (or is it Dr. Obbins? I'm confused) plan a shot.

PS: Please forgive the debt before my motorcycle-accident settlement check comes in.
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post #7 of 432
9/24/08 at 6:45am

Re: Are you changing your behavior in response to current events?

No debt whatsoever except for my insanely priced house.... But I always conserve cash, it's the nature of having way too many hobbies (including home theater) although I really don't buy DVDs and I'm no longer upgrading HT equipment, I have way too many other expensive hobbies like biking, mountaineering, kayaking that suck up my free time and wages.

Jay
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post #8 of 432
9/24/08 at 6:57am

Re: Are you changing your behavior in response to current events?

Quote:
(or is it Dr. Obbins? I'm confused)


Dave Robbins
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post #9 of 432
9/24/08 at 7:25am

Re: Are you changing your behavior in response to current events?

I did budget myself. I only play golf once a week and I have stopped eating out for lunch and dinners. I don't have any debt either. I got kind of lucky in that right about the time I was planning on buying a home the housing market tanked. So glad I didn't buy two years ago, no way I could sell now.
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post #10 of 432
9/24/08 at 7:40am

Re: Are you changing your behavior in response to current events?

This has been coming for a long time. I changed my habits a while ago. While everyone else was piling debt onto their home, I was paying it down.

M.
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post #11 of 432
9/24/08 at 7:54am

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by Lucia Duran
I just don't have the money to spare on extra stuff right now and I can only afford to buy neccessities. I realize that cash flow is good for the economy, but when you just don't have the funds or means, it makes it hard to put money back into the economy.

I was by no means encouraging people to spend money they don't have. That could result in irresponsibly increasing debt.
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post #12 of 432
9/24/08 at 8:10am

Re: Are you changing your behavior in response to current events?

Since getting my stupid college debt under control 10 years ago I've made sure that I always live within my means and only carry debt on my house. So no, I don't intend to make any major spending changes at this time probably because I'm not a big spender to begin with. I was planning to make some big financial investments a few weeks ago and boy am I glad I waited on that. I can't imagine how anyone carrying piles of avoidable debt is sleeping at night these days. Note I said avoidable. Sometimes life just hits you upside the head at the worst possible time.
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post #13 of 432
9/24/08 at 8:19am

Re: Are you changing your behavior in response to current events?

I wonder what is going to happen (for the first time, I believe this really could be bad), but there is also nothing I can do. I've been living insanely frugally for years, so there is absolutely nothing to cut. I'm actually spending slightly more than I have for years, but my situation is a bit more secure than it had been, plus, I also am starting to have a slight social life.
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post #14 of 432
9/24/08 at 8:22am
Thread Starter 

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by TonyD
btw this is very similar to the "just gave myself a $6000 raise" topic.
That thread was on my mind when I posted this.

Quote:
Originally Posted by nolesrule
Racking up debt would be a bad idea, but if you have enough cash reserves to handle a typical unemployment period, there's no point in cutting back on non-credit spending.

Cash flow is important to help a struggling economy. If people don't spend money, businesses lose revenue, creating job cuts. Then people don't have money to spend, so businesses lose revenue, creating job cuts....except in the credit industry, but that's part of the problem.
Indeed. I didn't understand this until I bought a house. And yet, to take my case, building a deck will cost $10k - $15k. It's a good thing, I can afford it, and if my "consumer confidence" were high, next year would be the time for it. But if I have worries about next year, then saving $10k+ feels very good, and I don't worry about esoterics like doing my small bit for the huge economy. (And I think it becomes a tragedy of the commons scenario).
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post #15 of 432
9/24/08 at 8:26am

Re: Are you changing your behavior in response to current events?

Well, if you want a deck, come over to my house and remove mine. You'll need to replace a few rotted planks but otherwise it's in good shape.

The deck is just more work to maintain than I anticipated when we bought the house.
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post #16 of 432
9/24/08 at 8:35am

Re: Are you changing your behavior in response to current events?

Quote:
And yet, to take my case, building a deck will cost $10k - $15k.
If you can cut a straight line and screw in screws with a drill, you could probably build your owns deck for $1k-$2k depending on the size. I believe that if you took the rough sketch to a place like Lowe's, they will give you a materials list and custom drawings. Decks are one of the easy construction projects from a skill level point of view.
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post #17 of 432
9/24/08 at 10:33am

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by drobbins
If you can cut a straight line and screw in screws with a drill, you could probably build your owns deck for $1k-$2k depending on the size. I believe that if you took the rough sketch to a place like Lowe's, they will give you a materials list and custom drawings. Decks are one of the easy construction projects from a skill level point of view.


It seems a bit more complicated than you paint it, yet...this is how I will change my behavior - I will attempt to build my own deck instead of paying 3-4 x cost of materials for labor on top of the material cost...

Also:
- I am bringing my own lunch in instead of buying it
- I am switching from Comcast to FIOS for an overall cheaper deal for the same services (good for a year of savings anyway)
- selling a bunch of no longer used or needed items on various forums including ebay, craigslist , etc
- installed a programmable thermostat to try and cut back on energy costs
- thinking about getting out of aquarium hobby (save energy and time)
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post #18 of 432
9/24/08 at 10:39am
Thread Starter 

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by drobbins
If you can cut a straight line and screw in screws with a drill, you could probably build your owns deck for $1k-$2k depending on the size. I believe that if you took the rough sketch to a place like Lowe's, they will give you a materials list and custom drawings. Decks are one of the easy construction projects from a skill level point of view.
The materials alone would cost about $2500-$5000, I think (450 sq ft, using Trex) It's 13 ft above ground (over the walk-out basement), and I'd be spending every weekend for months building my first major project. I'd rather contract it out, have it done professionally, and done in two weeks.

But you're right. If I really wanted a deck and also wanted to save money, I could do it myself and do it smaller.
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post #19 of 432
9/24/08 at 11:30am

Re: Are you changing your behavior in response to current events?

Five years ago I made the decision to pay higher rent within walking distance to where I live, in exchange for:

1. Filling up on gas only once a month vs. every 6 days
2. Despite living only 8 miles away from work my commute in L.A. would often creep up to 45 minutes or more one-way.
3. Wear and tear on my psyche (due to road rage, mostly from other L.A. drivers)

Back then gas was nowhere near what it is now, so I turned out to be a bit prescient. It's actually cheaper now to live where I do, despite the higher rent, given the current gas prices.

But that's pretty much the only thing I've changed for the economy: walking whenever I can vs. driving.

I just bought a new receiver, because I figure if banks are failing, I might as well put my money to use instead of keeping it in a volatile institution!
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post #20 of 432
9/24/08 at 11:41am

Re: Are you changing your behavior in response to current events?

I was already riding my motorcycle as much as possible, so that continues.

Although I had not intended to rack up any new debt, and I have just paid off quite a bit, I needed a newer vehicle with more room, so I bought a 2003 Toyota Tacoma double-cab. $16,000 seems to be almost half what a new one would have cost, so I don't think it is an extravagant expense. I financed it through the credit union at a decent rate. Now, I just need to sell the one I already have. Fortunately, Tacomas tend to be fairly recession-proof and always in demand. It will sell, but probably a tad below book ($5,500).

I have bought supplies for home improvement projects, but they are relatively minor. I did have plans to build a gazebo out back, but that is on hold both for time and not wanting to charge the supplies to a credit account.

Otherwise, I see no major expenses on the horizon, and no intention to finance anything anytime soon.
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post #21 of 432
9/24/08 at 11:56am

Re: Are you changing your behavior in response to current events?

I haven't changed my spending, but I've definitely changed my investing. Until we know the new "rules," I don't see how one can reasonably buy and sell stocks based on fundamentals. Most of my picks until now involved financial firms, but now it has become a complete crapshoot as to which firms will survive and what their balance sheets really mean.
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post #22 of 432
9/24/08 at 3:36pm

Re: Are you changing your behavior in response to current events?

Yeh, I'm kinda with Brian in taking some of the chips off the table until the next hand is dealt after Congress gets done enacting it's No Banker Left Behind Act. No debt but uncertain about the best avenue to deploy funds so it'll just be margaritas (or martinis) on the veranda for a while.

Mort
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post #23 of 432
9/24/08 at 3:42pm
Thread Starter 

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by Brian Perry
I haven't changed my spending, but I've definitely changed my investing. Until we know the new "rules," I don't see how one can reasonably buy and sell stocks based on fundamentals.
Won't the "rules" remain the same: buy index funds, use sensible asset allocation, think long term, and don't try to actively beat the market?
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post #24 of 432
9/24/08 at 6:27pm

Re: Are you changing your behavior in response to current events?

I dont have a credit card, so if i cant use cash, or buy with no interest on a store card, i dont buy. But the only debit i have right now, is my car, and my 1/2 of our mortgage.

I try not to worry much about things i cant change, like Wall Street, or how banks spend my money. Do we need a bank on every corner, with more being built all the time?
Cant change it, and i dont wanna die young worrying.
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post #25 of 432
9/24/08 at 6:59pm

Re: Are you changing your behavior in response to current events?

We're planning a vacation. My wife commented earlier today that she felt guilty spending money on luxeries with the economy in the shape it's in. I told her now is a perfect time to spend money, as long as you can afford it. I explained that by booking a cruise, we would be doing our part to deter layoffs in both the cruise and airline industries at the very least. Of course, there are also some awesome deals out there now.

As far as the economy goes, I'm of the belief that all economics are local. I have no debt [other than mortgage] and we are blessed with a great income, so other than gas prices, the economy is no worse than it has been in recent years from my perspective. Certain inappropriate and unwise practices are just coming to a head at this particular time. It's sad [IMHO] that the govt feels the need to get involved. As someone alluded above, they wouldn't do this for the average consumer, which I generally agree with. So why is it OK for corporate fat cats? This hurts my heart because I feel it is fundamentally wrong, and one of the reasons things are the way they are.

Sorry for the rant. Good and timely topic.

Thanks DaveF
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post #26 of 432
9/24/08 at 9:08pm

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by RickER
Do we need a bank on every corner, with more being built all the time?

We need less corners. Between fast food, banks, gas stations and drug stores, we have way too many.


Quote:
Originally Posted by John Dirk
As far as the economy goes, I'm of the belief that all economics are local.

They are, until the general public starts shopping in retail locations where the profits are funneled away from the local economy while at the same time suppressing wages of their employees so that they cannot contribute meaningfully to the local economy.
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post #27 of 432
9/25/08 at 4:50am

Re: Are you changing your behavior in response to current events?

Let's see...
The current issue was caused by credit being too easy and with low interest rates.
The reason we need to bail out Wall Street with $700 billion is because if we don't, rates will go up and credit will be hard to get. Maybe rates need to go up and credit needs to be harder so we don't have this happen again.

Just think, for the cost of this bail out, we could buy 70 Hadron Colliders
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post #28 of 432
9/25/08 at 5:04am

Re: Are you changing your behavior in response to current events?

Luckily I got out of credit card debt years ago and have refused to get back into that little hell.

However, I don't make much and I've had a strong desire to buy a small house to get away from renting. But the econ has me delaying that. Most likely, once I'm done taking care of the dog in my sig (Goldie has cancer), I'll find a higher playing job in another town, save and buy a house there.

That's my story!
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post #29 of 432
9/25/08 at 6:27am

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by DaveF
Won't the "rules" remain the same: buy index funds, use sensible asset allocation, think long term, and don't try to actively beat the market?
Those rules applied over the last ten years have netted a 16% return in the S&P. That's 16% total in 10 years, not per annum. You would have gotten better rates from a bank CD, or an ING Direct savings account.

Ask me how I know.
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post #30 of 432
9/25/08 at 6:32am

Re: Are you changing your behavior in response to current events?

Quote:
Originally Posted by Radioman970
Luckily I got out of credit card debt years ago and have refused to get back into that little hell.

However, I don't make much and I've had a strong desire to buy a small house to get away from renting. But the econ has me delaying that. Most likely, once I'm done taking care of the dog in my sig (Goldie has cancer), I'll find a higher playing job in another town, save and buy a house there.

That's my story!

Sorry to hear about your dog, that is always hard. My sympathies.
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