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I have pretty much cut out all non-essential purchases, choose more carefully where I drink a coffee or forego coffee out of the house all together, and am much more careful with any purchases I do make.
All but non-essential travel has been cut and the choice of hotel is much more based on price than it would have been before. Any leisure travel I do take will be closer to home with cost consideration a major component of choice.
What about you?
Dont go to coffee houses as much but I guess thats due to the novelty wearing off more than anything else, spending more on books and less on films.
We have stopped making plans on projects that would draw down a lot of cash, even if we have cash. We are putting off painting the house, for example, not that it really needs it. No new cars for several reason--one is that in 2010 or 2011 we might see more appealing technology.
We can hold at this lower level of spending for another 24 months.
Ok. Would have bought that stuff anyway. Crisis or not.
What Crisis?
Bigger up front expenditures for stuff like skiing. Bought a season pass instead of individual lift tix and went in on a ski house so I know what I'm doing every weekend and don't have to think about what I'm going to have to spend each weekend.
Not holding back when there is a good deal on a ski trip. If I can go and its a deal, its better to take advantage of the opportunity than have the cash and the opportunity lost because investments go south.
Keep $$$ in different financial institutions. Put money in municipal bonds for the tax free yield and relative stability of principle.
Except for 401K (& might even cut that out) putting no new money in the stock market since it'll probably get worse not better over the next couple years. Banks will still have to deal with this round of mortgage resets [bp3.blogger.com].
Don't buy anything that can't be paid in cash for - Don't Buy Stuff You Cannot Afford [hulu.com]
Will probably spend more on various classes to broaden skill sets in web related areas and non web related areas.
I've always believed that if you ignore the rest of the world and just keep your eye on the prize, remember what's important, the world will keep on doing what it's always done. Whatever downturns the economy has will swing back up. If it doesn't, see ya' all on the other side, because that would be the only alternative. :-)
However, things may get very bad in before they get better. In fact I haven't actually ruled out economic meltdown ;)
I did see something on TV a few nights ago about keeping on top of your finances from staying on top of who offers the best gas/electric prices, phone tarrifs, credit card if you have one, interest rates etc. If you stay on top of everything you have you can save so much however most people can't be bothered. including me, im lazy.
So for me when I said "what crisis" I don't see too much change.
How about we start rumours about a giant internet crisis to get rid of our debts and our unpayed outgoing invoices. I'd be happy to sell all the bills some of my customers did not pay over the last few years to a government run "bad bank" or "bad enterprise" or whatever.
Who's with me?
[edited by: jecasc at 7:52 am (utc) on Feb. 1, 2009]
This "crisis" has been made far worse by the media (especially the BBC with their odious correspondent Robert Peston who talks mainly nonsense and has the demeanour of an attendant at a funeral home), they seem to relish this global downturn and even the way news is delivered is negative. The BBC even had a "Credit Crunch" logo for fecks sake.
No wonder that normal sensible people are under the impression that they are suddenly worse off. No they are not!
Not worried about the economy; but it's good to take advantage of the 'excuse' to cut back on expenditure.
Unlike many here, I don't think consumers have a duty to spend - I believe a stable economy is built upon thrift and moderation.
And that there is the problem- the velocity of money exchange has dropped as people service debt. And Robert Peston is not the reason for that. (An aside on RP- he reports on the CITY, the BBC have the Stephanomics blog for the wider economy. The CITY is in HUGE trouble, but RP overplays the impact to the wider economy).
Three main factors are at play. One is confidence. People are chosing to reduce their debts rather than spend cash, because they expect trouble and don't want to be saddled with those debts.
Another is asset price falling. If you have lower value assets, you are a credit risk as the lender cannot recover their losses from your assets if you default. Thus, no lending to YOU (the assetless one)
Finally, there is the reduction of credit availablity. This is because banks cannot refinance their own monetary shortfall. To compensate, they keep hold of their money (avoiding the shortfall). Keeping hold of their money means they are not lending it. No credit.
Small businesses (the furnace of the modern economy) are stuggling because many have the model of
"I have an order for 10K. I need to borrow 8K now, will pay back 9K and keep 1k".
Because banks wont lend, that order does not happen, and value is lost from the system.
The fact is, those who rely on short-term credit are stuggling. Those who have long-term credit agreements are doing well. Those who need no credit are in a great position to buy up undervalued assets when the recession begins to ease. So... who wants to call the bottom?
[edited by: Shaddows at 11:05 am (utc) on Feb. 2, 2009]
So... who wants to call the bottom?
This is all just the prelude to a chain of events that will see a fundamental change to our way of life. Most research concludes that somewhere between 2012 to 2014 global realisation of these changes comes to the forefront. The planet is at the brink of a new era and it's going to be one hell of a bumpy ride. Sit back, buckle up and enjoy what's coming :-)
