Higher Prices, Lower Wages

There was an article in the Des Moines Register today that confirmed what everyone already knows, prices have gone up.  The premise of the article was that many people have not recovered from the Great Recession because prices have gone up and wages have gone down.  Okay, I already knew that, but the article gave statistical information which I found quite interesting.

In Iowa the median household income in 2007 was $52,371 and in 2012 was $50,957.  In the U.S. as a whole the median household income in 2007 was $56,189 and in 2012 was $51,371.  Americans are paying about 12.5% more for household goods.  In 2007 a pound of ground beef cost $2.40 and in August of this year a pound cost $3.46.  A loaf of whole wheat bread in 2007 cost $1.71 while in August of this year a loaf cost $2.04.  A pound of coffee was $3.50 in 2007 and in August of this year a pound was $5.21.  Gasoline has consistently fluctuated over the past few years and has increased to the point that it was not uncommon in Iowa to pay an average of $3.37 by the end of August this year.  Fortunately as of today, the price of a gallon of gas in our area is $2.97. 

Many Americans continue to feel the pinch as they are still cutting back, have tried to adjust to lower wages, higher costs, have lost their homes, jobs, are having problems paying their mortgage and have increased credit card debt in order to pay basic bills. 

The recent fiasco in Congress created more financial problems for many people which has led me to believe this:  we are on our own people.  I have stated this recently on this blog.  While thankfully there are programs that can be helpful for families, many people don’t want to have to need these programs.   It is comforting that they are there to help but when the government shut down occurred some of these resource programs were suspended such as the W.I.C. program (Women, Infants and Children).

I believe it is becoming the responsibility of each of us to take care of each other.  If you have a little extra and you have a neighbor in need, it is up to us to take care of our neighbors.  Sometimes we may not have a lot, but a loaf of bread or a half a gallon of milk can go a long way for someone who does not have much.

Recently I had an individual comment and ask what I am doing to combat higher prices.  I cut out some frills in our budget such as getting my nails done and working out at Curves to help our budget, but there is more that I can do.  I have become a little lax, but with retirement only 13 years away and the desire to continue to be a stay at home wife and grandmother, there is more I need to do. 

You know what it is like, you sacrifice for such a long time, you need a vacation from the sacrificing.  You get tired of counting pennies and you just want to go out to a restaurant and spend some money on a great meal.  I have been there.  Funny thing is this:  I can buy a 16 oz. steak on sale for $6.99 (recently $4.99), cut it in two, grill it, add a potato, small salad and a homemade dessert for a lot less than I will spend for the two of us at a great restaurant and it tastes better.  The same is true if I marinate some inexpensive chicken breasts and grill them with some vegetables.  The point is that sometimes you need to take a break from the scrimping but you don’t need to throw the budget out the window.  Sometimes it is creating a special meal and serve it by candle light OR as we did when our kids were little, having pizza on a blanket on the living room floor in the winter  - our version of a winter picnic.

When it comes to scrimping and getting the most out of your hard earned money, there is one thing that will save you a lot:  being aware of what you are doing daily.  I know it sounds weird, but think about it.  Are you aware when you run the water for a shower or bath how much water you are using?  When you squirt dish soap into the dish pan to wash dishes, are you using too much soap, the same being true for dishwasher detergent? When you cook a casserole could you get by with using less meat and more vegetables or pasta and rice?   Instead of purchasing ice cream bars and cones as a treat, buy a half gallon of ice cream on sale and put it in your own cones.  Sprinkle a few inexpensive sprinkles on top and you have a cheap treat for your kids.  Treats are great to keep us going during hard times.

One thing I know is a fact, you can still get great results in cleaning products by using less.  You can save even more money by making your own products or by using plain water to clean extremely dirty windows and then spritzing on the cleaner to finish them off.   The same is for dirty services of any kind.  Get the dirt or grime off as much as possible with warm or hot water and then spritz on the cleaner at the end to finish the cleaning process.

Be aware of what you are doing throughout the day and you will find ways to save money.  

As far as combating food prices, my main tool is my freezer and a storage space for pantry items.  Buying meat and frozen vegetables when they are on sale is a great tool.  If you only have the freezer above your fridge to use, then use it for expensive food items that go on sale such as meat. 

I am a believer in Ivory bar soap.  I can get it on sale with coupons all the time for about 15 cents a bar.  I am steering myself away from the shower gels which are costly.  I don’t need the fragrance as I spritz on a very light amount of perfume after I dress.  No need for the scents of a shampoo with a shower gel and then a lotion along with perfume.  Don’t buy into all of the hype and instead find a bar soap that is cheaper that you like. 

When I am at the store if I need a product and don’t have a coupon, I always give the store brand a try.  This is true for many items.  I am not brand loyal and I am always looking for a cheaper alternative.  For basic items such as canned tomatoes, pork n beans, and such I can virtually not see or taste a difference especially when these items are going into soup, chili and casseroles.  I have always added my own ingredients to pork n beans (ketchup, mustard, brown sugar and vinegar).  Why would I care if they are name brand, store brand or generic?  The same is true of laundry detergent.  If I get a name brand on sale at a really great deal, I buy it (during the summer I can get a great deal on Tide).  I reserve a bottle of  Tide, Wisk, Oxydol or other name brand for those wicked stains that won’t come out.  Then I mix the rest half and half with a store brand that I get on sale.  Once a year a store here in town has their store brand detergent on sale for $1.00 or less for a 29 load size.  I have also done the same with mixing sale bought name brand powdered detergent with the Fels Naptha powdered laundry soap recipe.

I use ivory bar soap (rub it into the stain and let it sit) or a small amount of liquid Dawn dish detergent for pretreating stains.   And since we are on the discussion of laundry, does each family need a ton of clothes in their closets? 

If you have children in the home and you are working, you will have a much more difficult time in saving money because you are busy and you may not have the time to do some money saving tasks.  I am going to address this in another post this week as I have been there and I am also there a little bit now with watching my grandson 4 days a week.  What questions do you have about saving money in general or in a specific area?  What help or ideas do you have or need?  Where are you at in your household budget?  Are you discouraged and struggling?  We may be facing a different America than was there 20 or 40 years ago, but if you are willing to put forth effort and keep a smile on your face, you can make it.  It is sometimes about attitude and the willingness to not give up. 

Leave a comment and I will address them.  

Preparing for the Coming Economic Storm

Could we be facing another economic downturn?

I trust my instincts. There is an uneasiness about me right now. I read, I listen to the news, I read my local newspaper and the Des Moines Register and when you read and listen; you get a sinking feeling that your instincts may be spot on. The economy is on the edge. 

The economy is stalling out. We are entwined in the global economy and what goes on in other countries can and does affect us. Look to Europe and you see countries in financial trouble that are linked to other countries. What will happen to Greece and Spain? And then there is China and the slowdown of its economy. Oh and wait - don’t forget the debt ceiling crisis that we will re-visit this summer. 

Ben Bernanke speaks before Congress this week. What will he say? Will there be more stimulus action? And what about Wall Street and how will all of the above affect the stock market. Oh yeah and then there is Jamie Dimon and JP Morgan’s loss and what about Barclay’s admitting to falsifying Libor Reports to the Fed? Have these companies not learned from past mistakes? Oh yeah, there is something called Greed. Hmmm. 

The unemployment figure is hovering at 8% and then there is the weather we need to throw into the mix. Drought is affecting crops, livestock and will hurt small businesses and many farmers. Food prices will be rising, although beef will be cheaper to begin with as farmers/ranchers have sold off some of their herd because they can’t afford to feed the livestock. 

January 1, 2013 is an ominous date. As was reported recently on NPR (National Public Radio) “If Washington doesn't act by that day, tax rates will shoot up for everyone. Huge, indiscriminate cuts in military and domestic programs will take place. And, shortly after that, the nation will again hit the debt ceiling, putting into doubt whether the government can pay its bills.” 

And in the middle of all of this mess is Congress. Members of Congress seem to run from ever compromising on anything. Both parties are guilty of this. It is as if they are involved in a sporting game and each party must be right and win all the time, except we are the losers. 

I feel that there is a storm brewing and it could end up being just as bad as 2008 or come close to it. If you look to the years after the stock market crash of 1929, you will note the ups and downs of our economy as we worked our way through hard times. 

In recent months I feel that consumers have been lulled into the belief that we won’t ever have to experience another 2008. Last Christmas the news reported about how much spending was up versus the previous 2 or 3 Christmases. I’ll never forget one interview in which a few people acknowledged that they were just tired of cutting back and not being able to give more at Christmas and they were going to buy what they wanted even if they had to put it on a credit card. 

Okay – so what can I do about all of this. Plenty. And that is the good news. Instead of sticking my head in the sand, I am being proactive. Look back to 2008 and think about what you would have done to be better prepared for what was to come if you had realized it before hand. Well, we could be facing the same thing so what are you going to do? 

The first thing is not to panic but to realize that we have the resources to handle another impending financial crisis if we take action now. Let’s just say that we have 6 months to a year before another financial crisis hits the U.S. Knowing this, what can we do? 

1. Cease unnecessary spending and grow your savings. However, if you don’t have a freezer, you should put this as a priority/necessity purchase. See Number 4. 

2. Cut expenses as much as reasonably possible. 

3. Pay off debt. We accumulated some consumer debt about 6 months ago when we needed some bunk beds and a new refrigerator. Time to get down to business and get it paid off. 

4. Stock your freezer and pantry with sale items and if you haven’t ever done this before, do it now. 

5. Grow your income. 

I recently took a part time job working at our Public Library. The job is definitely part time as it requires my working just 3 Saturdays a month for about 4 to 5 hours each day. However I will be working more hours in August to cover for vacations and will continue to do so as needed. I won’t be getting rich, but it will be some extra money each month to put in savings. 

Think about doing the same. Is there some way that you could earn some additional income for your family? Sit down and make a list of the possibilities. If you are not presently working outside the home, consider a part time job.  Remember that you don’t want this part time job to take extra expenses away from your income. Do as much as possible to find something that won’t cost you more in expenses than the income you will be bringing in. 

Remember that this job doesn’t have to be a lifetime commitment. It can be temporary but it could be a god send if you run into financial trouble. For me, I love my job at the library and hope to keep it for many years to come.

Perhaps you have little ones and earning extra income is not possible at this time, but you may find an opportunity every now and then to earn a little cash by babysitting. Instead of taking that extra cash and spending it, put it in the bank. Maybe you will come across a little part time job like mine and your spouse can watch the kids the Saturday afternoon that you work. Or maybe it would be easier to cut back and not buy a lot of clothes for the entire family and wear what you already own for the next year.

5. For one year do the above and see what happens to your finances. If after one year everything is fine, then you will have less debt and more money in the bank. But if the worse happens and a job loss comes your way, you at least have some money in the bank and a plan. 

Join me in my own austerity plan to grow my income, put money into savings and pay down debt. Sticking our head in the sand is not an option. Hoping and praying that bad economic times don’t come our way is not a plan. Be proactive and create a plan so that if we experience another financial crisis, you will be better able to work your way through it.  Don't look back one year from now and wish you would have done something.  

Been a Hot and Busy Week

Like most of the country, we have been experiencing quite a heat wave in Iowa. The daytime temperatures have been in the 90's and 100 degree Fahrenheit with a heat index today of 105 degrees Fahrenheit. I don't mind breaking records in a sporting event but not when it comes to the weather. Unless it is for the greatest weather ever - that would be a record I would like to see.

When it is this hot, you might as well know that your electric bill will be very high due to using air conditioning. There is just no way getting around not using air conditioning when it is this hot. It is just too dangerous not to use it. The only way to save money is to turn your thermostat up so that you are comfortable but not cold. I have been keeping the thermostat at 78 to 80 degrees mostly so that the air conditioner wouldn't run constantly. Our air conditioner is 20 years old and you never know when it will go. Hopefully we can get through this summer without any problems.

My week has been busy as I started my training at the public library. The first day of my training I felt like I had made a big mistake in taking the job. There are so many policies, procedures and general how to's to learn and I was overwhelmed. Then the second day came and I went home again feeling like I would never get it and I might have to give up. By the third day, I was starting to understand and then yesterday I was "getting it" more and more. In fact as I walked home yesterday I was so glad that I had answered the ad. 

The women that I work with are very nice. I am definitely on a team and what I like the most is that we are all there to serve the public which is something I enjoy.

Today I went to the library on my own time to just walk around and make sure I knew where things were located. As I sit and type this I know that I am going to understand the job more and more and that I am definitely glad that I answered that ad and was offered the opportunity to work at the library.

I will work a few Saturdays a month and will also cover as needed for vacations. It won't interrupt my schedule at home and the income I receive will pay off some bills and add money to savings. It is nice to have something to call my own again. Also I am an immense history buff and avid learner so working at a library is perfect for me. 

Since I took the library job I have encountered several women who are working a few part time jobs. For whatever reason they cannot find full time employment and have pieced together 2 or even 3 part time jobs together. I honestly don't know when these women have a day off or a break. It is something that I have encountered with college students also. 

I talked with one of these women and she looked tired, and I mean very tired. I don't know how she keeps her schedule straight, but as she said - these jobs pay her bills and that is what is most important. After talking with her I felt quite fortunate that even though I am working a small part time job, our life does not depend on it and I don't have to work several jobs to make ends meet.

Life is not easy for many people and I fear that with the extremely hot weather and drought like conditions that we may be in for higher food prices and perhaps lay offs from farm related industries. It's a perfect example of the trickle down effect. Practicing frugality with the addition of a part time job or temporary job will help families offset the rising prices and cost of living.

Living a Downsized Life or Lowering your expectations, Plus some tips from Amy Dacyczyn

My father was born in 1917. My mother was born in 1930. I was born in 1959. My father was a disabled American veteran from injuries he received serving in World War II. He worked in a factory for 31 years and he earned 2/3’s the wage of an able bodied worker. Still on that low salary he was able to buy a home and fix it up and pay off the mortgage. Our family had one car until we were able to get a second car for only $100. It was a “beater” that my dad took to work so my mom could use the family car when she needed it.

My mom went to work when I was in 9th grade and all of her salary went to put my sister and me through college. Then she quit working once this was accomplished.

My parents were able to fulfill their American dream on a lot less money than most families were earning at that time. The difference is in the kind of house they owned, the type of cars we drove, the clothes we wore and the food we ate.  So, can you still have the same dream now?

The answer is yes but we have to go back to living with the values of the time that my parents’ lived. Both lived through the Depression, World War II and many economic troubling times such as we lived through in the 1970’s with layoffs and strikes.  What does it take? It takes the courage to buck the system and dare to live below our means even when we have all of our debts paid off and we could spend more on stuff.

I believe the American Dream is still alive if we downsize our expectations.

Now some advice from Amy Dacyczyn.

Retail Revelation – Second Hand Clothes for teenagers

When Amy was writing her newsletter she received some letters from readers that said “just wait until you’re kids become teenagers” meaning they would rebel if they had to wear second hand clothes. One day Amy took her daughter to some major department stores so that her daughter could show Amy her “style.” Amy and her daughter were surprised at the selection of clothes and even her daughter was shocked at the prices of the clothing. About the only thing that her daughter saw that she liked were jeans, flared jean skirts and dark colored turtle necks. These three items could be found at garage sales or thrift stores without a problem.

Then Amy took her daughter to the Salvation Army and she found a denim skirt with a little lace at the bottom which her daughter loved. Amy bought it for her. Their thrift shop shopping trip paid off as her daughter saw that the thrift store did have about the same thing that the department stores had. Amy surmised that her daughter felt like she was missing something by not going to stores to look at brand new clothing. Her daughter quickly realized that she wasn’t missing a thing and could find what she liked at a thrift store.

I think that this is a great idea for a teenage girl especially if you give them an allowance for clothing and they can see how much more can be purchased at thrift stores. I have looked through catalogs and gone to department stores to look at the styles and then I have gone to several thrift stores to see if there is a way to replicate the same look. It definitely can be done and I think it is so much more fun to find “retro” clothing or used clothing and make it into a different look.

The key is to downsize your wardrobe and try to make use of several items to mix and match. Thrift shops are also great for finding some neat accessory items.

Let's Help Each Other Out

Tomorrow I will be posting from our Tightwad Gazette III reading. 

This afternoon I was reading some of the comments on my site.
Rose over at Simple Everyday Living posted some comments as to my pantry and the amount of meat I have in my freezer for a 6 month supply.  I will do my best this week to follow up with the answer to that question.  As many people know, I am a big believer of buying items on sale and stocking up. 

In the meantime, I know there are people that read my blog and have great ideas of their own on saving money.  Some are on my blog roll.  If you're not on my blogroll and you want to share some money saving tips, leave a comment with your blog link and I will put it on my blogroll.  Sometimes you think that no one will want to do some extreme things to save money, but I am here to tell you that even extreme ideas are welcome. 

Just use your imagination.  I really believe that people need to come to the realization that we need to view our money as a precious commodity, be better stewards of what God has given us and that it is okay to adopt a "Great Depression like" mentality of stretching our resources. 

Then I think it would be wonderful if you would challenge yourself to learn one new skill over the next few weeks.  It could be that you don't cook much and need to learn.   For me it will be gardening and canning.  It is too late to plant this year, but I can start to read and study the subject so I can be prepared to garden next year.  Perhaps I should be digging up some ground in my backyard this fall to prepare my garden for the spring.  I have no idea.

So post your blog links and let's help each other out.

The Economy is in Bad Shape - No News Here

Over the past several weeks, or should I really say months, Congress has been at odds regarding raising the debt ceiling. The economy is in bad shape and frankly I am quite worried. That is all I will say about that. I don’t want to talk politics, I just want to say that we are living in a very difficult economic time. The one thing that I have learned from this is that we have to depend on ourselves to take care of our own family, neighbors and friends. This is a philosophy that was common amongst our grandparents and great grandparents.

I have been listening to the news and reading the paper and here is what I have learned:

1. Crops are failing due to the weather – flooding, droughts, storms. Crops failing mean prices are going up on items such as food and clothing as two examples. Of all the problems with the weather one thing made me sit up and really take notice. There was a dust storm in Phoenix on July 5th and the pictures that were shown of that dust storm looked exactly like the Black Blizzards of the Dust Bowl years of the 1930’s.






2. Oil prices are fluctuating up and down and there is uncertainty as to when prices will drop and level off for good.

3. Our economy continues to struggle.

4. Unemployment remains high and lay offs continue.

5. The housing market is still in the toilet.

Forget Obama care and forget if you are a Republican, Democrat, Independent, Tea Party member or anything else – truth is we can point the blame at a lot of people which is easy to do when you are looking at anything in hindsight.

Back in 2009 I was optimistic about our economy as I felt that by the end of 2010 we would be working our way out of this economic mess. Now I truly believe that we have a few years ahead of us until we begin to recover. 

I have been reading a book entitled The Great Depression: A Diary. It was written by an attorney who lived in Youngstown, Ohio and as you can guess, he kept a diary from the crash and throughout the Great Depression. His diary mirrors a lot of what we are going through right now. There are so many comparisons but most of all he gives advice to anyone who reads his diary about how to be financially secure in your life such as simply not borrowing much and living way below your means so that you can put money away for hard economic times.

Ever since we got back from vacation I have become increasingly concerned about my family’s future.  Costs are up and lay offs continue and if you have a job it doesn't mean that you will keep your job.  So what is a person to do?

Sit down and take a piece of paper and ask yourself this question. If this continues for several years, what is my plan for my family’s financial future?

Here is the list that I came up with:

1. Next year I will find a place in our small backyard to plant a garden and grow as many of our vegetables as possible.

2. Money comes with responsibility. I will look at all money that comes in our house as a precious commodity.

3. I will take better care of what we already have be it furniture, electronics, cars, clothing or food.

4. I will not waste anything and will find opportunities to save our resources.

5. I will make a list of financial goals for our family.

6. I will refer to the Tightwad Gazette books often for ideas.

During the spring when I was eating out of the pantry and freezer, my freezer and pantry didn’t get totally depleted, but both went down by about one-third. There weren’t a lot of sales on meat until about 3 weeks ago. I realized that from what I was reading in the paper about prices going up, that I really had to spend extra money in order to stock and really pack my freezer.

Right now I have a 6 month supply of meat, toiletries, baking items, laundry supplies and paper products. I have about a 4 month supply of canned goods and a 3 month supply of cereal.

My grocery budget for as long as possible will be $37.50 per week ($150 for a 4 week period). I want to leave a generous amount for fresh produce and to also pick up some sale items such as canned goods and cereal. Even though I over spent for a few weeks, I will save in the end. I have done this before but never have I ever felt like I must really take to heart what we have on hand to stretch into as many meals as possible.

With prices going up I may never see food, especially meat, at these prices again. I am really serious about doing this and about making good use of what we have on hand. That means that I will be stretching those foods and trying out new recipes.

I am going to put the kitchen makeover on hold except for the wainscoting and painting.  The rest can wait.

This isn’t a lark, this isn’t a challenge, this is life.  It's time to get serious and face the harsh reality that our economy may continnue to struggle for a few years.  We've been living in denial, looking for a quick fix to return us to prosperity.  But as the 1930's song said "Prosperity is just around the corner.  Which corner is it just around?"   

I'm not panicking but I don't want to sit here one year from now(when we could be in an economy that has slipped into another recession that is worse than the one we experienced 2 years ago)  and wish I had been more prepared financially for whatever we may face then. 

It's time to dig in and get serious for the sake of our families and future.

Time to Dust off those Tightwad Gazette Books

As I work around my house or as I am cooking a meal, my mind tends to wander. This can be a problem if I am baking cookies and can’t remember if I put in the baking soda. As a side note, I think someone should invent colored baking soda that loses its color when baked. Then you can see if you added it to your cookie dough or not.
I’m a dreamer, a thinker, and maybe I think too much on certain things to my own detriment.

But high prices are on my mind and have been for several weeks. How do you effectively fight higher prices? Shopping sales, using coupons, driving less are some great examples, but what else?

I surf the web and I am constantly on the lookout for any new money saving ideas. I haven’t found any in a very long time. I do have all three Tightwad Gazette books that I refer to sometimes.

After a lot of thought I feel that the key to fighting higher prices is with “time”. The more time I have, the more time I can spend on saving money. Here are some examples: I can save money on gasoline by walking or riding my bike, which take more time. I can save money on groceries by spending time on the internet scouring for great coupons, clipping coupons and organizing them. I can save money on good whole wheat bread by making my own. I can save money on clothes by hanging them up to dry so that they last longer, by making repairs to our clothes on my own and by shopping at thrift stores. I can save money on groceries by making more and more items from scratch. I can save money on gifts, by making them. I can save money on haircuts by cutting my DH’s hair. Doing our own home repairs saves money. What about gardening and preserving your own food?

All of these examples take time in order to save money. I don’t have a job outside the home so I do have the time to do all of the above. And because I am home, I feel obligated to do as much as I can in order to save money in order to combat high prices.

I mentioned the Tightwad Gazette earlier. If you have ever read these books, you will undoubtedly come to the conclusion that there are definitely a few categories of saving. Many of the tips in these books involve different levels of frugality depending on, in my opinion, how much time you have on hand and what your financial situation is like. I have followed many of the tips in these books but some I never used due to time. Not anymore.

I am making it a point during the month of March to begin to go through these books and really look at every tip. I need to re-read these books in the light of today’s economy. So, not only will March be Random Acts of Kindness month for me, but it will also be Amy Dacyczyn month. Yep, I am going to go through her first Tightwad Gazette book and hopefully each day I will post a frugal idea from the book and see if I can save some money. I will also discover how much time each idea or tip involves and see if it is something that will work for me.

In April I will continue with the second book and then in May I will finish with her third Tightwad Gazette book. March 1st begins on Tuesday. The book starts on page 3 and ends on page 295. There are 31 days in March so we I will need to read and review 9 to 10 pages each day. So, are you with me? Do you want to read along with me and look at these books from a new perspective?

It’s time to get serious. I feel as if I am at war with this economy and with high prices. So, ladies (or any gentlemen that read my blog), dust off those Tightwad Gazettes and let’s start going through the first book together.

10% unemployment the New Norm??

My husband read an article in a a financial magazine today and he shared it with me.  You can read it here.  The basic premise of the article was that unless there is some breakthrough innovation to stimulate the economy, we could be stuck with unemployment in the 9% to 10% range and that could be the new normal.  Then in a strong "new" economy, unemployment may dip below 8% but the days of 5.5% to 6% unemployment are behind us. 

This is rather interesting and perhaps depressing.   The reason I read articles about the economy is that I like to be knowledgeable and prepared. 

Is it  possible that in light of the Great Recession that our economy cannot or will never be able to support the number of jobs that people want and need?  And if this is true, does it mean that we need to lower our expectations and dreams?  Will one income families become the new normal?  And if one income families are to become the new normal, will the wages earned by one person be enough to support the family?  And what about benefits?  Are those going to disappear? 

I'm not sure what the future holds, but I do think that the smartest thing for everyone to do is to not lose heart.  Perhaps we need to lower our expectations of how we will now be living.  We can have homes, but we may not be able to afford the McMansions that many people would like to have.  A nice not so new 3 bedroom 1,200 square foot ranch style home may become the new dream.  Hey, it was my parent's dream back in the 1950's. 

I have had to scale back my dreams, but they were only dreams to begin with, nothing firm.    We lost a lot of retirement money, on paper that is, so living cheaper now and for the next several years is prudent.  But, we have a house and a lot of people have gone through foreclosures or cannot afford a home.  My husband has a job and although it has taken a little creativity some days, we are living on his income and over time as debt is paid, we will be able to put money in the bank for our future. 

However, just because he has a job now, doesn't mean we have the guarantee that his job is secure.  No one can say that now.  Of all the lessons learned over the past few years is that no one's job is secure and while there is such a thing as unemployment benefits, the best advice is to save for that rainy day and not to entirely depend on government assistance alone to get you through a period of unemployment.  It is worth the sacrifice of cutting back on spending in order to save even a small sum of money.  It's a beginning.

I remember the way it used to be at this time of year.  In my husband's previous job, he would receive a Christmas bonus and would get a raise in early January.  When I was working I would get a Christmas bonus and raise also.  Those days are gone.  But that's okay. 

So, perhaps we are learning a new way to live, scaling back our dreams and finding new ones.

Lessons from the Economy

In the past week there have been a lot of news reports and newspaper articles suggesting that the economy is rebounding slowly or we are in danger of swinging into a double dip recession. I am not an economist, although I do find the cause and effect situation very interesting. I read everything I can about the current economy, not because I am a pessimist but for the reason that knowledge is power. We could be in for a few more lean years and knowing that helps in making decisions and financial goals.

This is why I keep doing what I am doing - making my own laundry soap, hanging clothes on the line, unplugging electrical items when not in use, finding any way I can to save some money - it is not only for our present living circumstances, but for our future.  Some of the money saving things I do, many of my friends would never even consider.   Then again I never want to work full time again and I never want to be caught unprepared if the economy should tank again.  I'm not saying that we should live in fear, instead we should make financial decisions so that we are prepared for anything that life throws at us.

I live in Iowa and I read the Des Moines Register.  Per that newspaper, nationally the recession began in December 2007 and it hit Iowa in October 2008.  An economist is predicting that Iowa won't return to its pre-recession employment until the end of 2011.   That is probably the best case scenario.  What does this tell me?  More and more people will need help from my local food pantry and I need to step up to the plate and save money so that I can in turn give more.  It also tells me that I need to continue on the path to frugality and learn more ways to save money along with being more diligent and intentional about saving money.  This isn't temporary.  When the economy rebounds, and history shows that it will, I will continue to be frugal.  It only makes sense.  After all living below your means brings peace of mind. 

In the Des Moines Register there is a column that I read called "Your Two Cents Worth" in which readers briefly make a comment about anything.  Here is what was in the paper today "I still need a job.  I will work more than one if it will pay my bills.  I've given up so much already, that some extra time away from my kids to work a second job couldn't possibly hurt much more.  I used to be a health care worker."  and this one:  "Where do you go for support when the only problem you have is that you cannot get a job? I have never been this depressed before." 

The next jobs report comes out on Friday and people are already wondering what that report will say.  Now we are also learning that the recession has inflicted more damage on the economy than previously thought.

Why am I posting this and even bringing all of this bad news up?  Because there is something I can do about this.

My DH has a job and we have adjusted our lifestyle to live on his income.  We have had bumps along the way but for the most part we are making it.  However, I never want to go through another financial meltdown or "Great Recession" unprepared.  That is why I find any way I can to save some money that I can in turn put in the bank.  I am sure that a lot of people feel the same way.  It goes back to people that lived through the Great Depression. Those individuals became frugal throughout their life and I would say that by living below their means and stretching their resources, they were probably happier because they were prepared for leaner economic times. 

Again another comment from the "Your Two Cents Worth" article in today's paper - "Most of us who grew up during the Depression clean our plates, turn off the lights and squeeze the last bit of toothpaste out of the tube.  Squeezing that last bit of toothpaste out probably is not worth the trouble, but old habits die hard."

We have goals for our future - retirement, siding and new windows for the house, a new roof, putting our son through college and lastly (but not necessarily the least important), a nice big fat savings account for the future.  I also have a goal to continue to support our local food pantry and to continue to give money to our church.

Some people would rather not read anything in the newspaper and forget about the economic meltdown.  I am reminded daily from reading the newspaper that I am blessed that my DH has a job and it affirms my continued path to live a frugal lifestyle.