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Sorry, but this is \"ant and the grasshopper\" stuff. If people have the money and resources but aren't preparing ahead of time for hard times, it's a little late now.
If everybody had been living within their means for the past ten years instead of borrowing to buy things they can't afford, the height wouldn't have been so high and the bottom not so low.
It's almost like the game \"Lemmings\": if you plan ahead and keep the drop less than a certain height, everyone will survive.
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@P_Smith: What a ridiculous comment. What is \"living within your means\". If you worked for a company and made 100k per year for 10 years, or worked for $20k per year, when you lose the job you go to zero. Yes everybody could live cheaper. Is your internet service free? Most are not, and is it really necessary. You could not buy a computer and just use the library or not use one at all. You could take the bus, a car is not a necessity. You could live with mom and dad at 45 and reduce rent or house payments. Of course a smart ass could say I paid off my house, which is nice, until you realize you still have to pay property taxes on them.
This is clearly advice if you LOSE your job, and your means change dramatically overnight. A person could work for 10 years, saved 20 per cent of their income, and this advice is valid. Unless you know you can get a job quickly savings can be eaten rapidly.
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@thrid001: True, but having savings greatly reduces the damage. Every dollar you borrow costs you several dollars to pay back. Every dollar from savings costs you $1 to pay back. In addition, the more you tap your credit, the bigger the hit on your credit score.
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Everybody over a subsistence living should save something. If it's $5 a month, then that's better than nothing. Put it away regularly before you have disposable income.
@thrid001: A stupid comment is assuming - as you did - that everyone lives in the same circumstances.
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@thrid001: \"Of course a smart ass could say I paid off my house, which is nice, until you realize you still have to pay property taxes on them.\"
Or that even paid-off houses do things like spring massive basement leaks that provide you an awesome indoor swimming pool, which will run through your emergency fund super-fast when you're working ... let alone when you're not.
We had this happen 18 months ago and it seriously wiped out our entire emergency fund (we'd only been out of school and working for about 1.5 or 2 years at the time, so we'd not been building the fund too long, having bought the house, moved, etc.). We had to start completely over on savings. I have no idea what we would have done if we'd been unemployed or if we hadn't had what little savings we had.
@P_Smith: I know so many people that have not been living beyond their means or wasting money on plasma TVs but are still struggling to get their expenses down or to save for emergencies. The cost of everything vs. wages has quietly eroded over the last decade or more.
There are some who foolishly wasted their paychecks, there are plenty who have been trying to just keep up.
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@P_Smith: Some of these tips are useful for people like me, who are literally JUST starting out in their careers. I've been out of university for six months. Ten years ago I was living with my parents and going to high school... I didn' thave any \"means\" to live within! Today I have a plan in place to pay off my student loans in the next four years, I don't have any other debt, and I've saved about a quarter or a fifth of what I'll need to put a down payment on a nice, two-bedroom condo. However, if I lost my job I would be in major financial trouble. I haven't had enough time in the workforce to save more than I have. I didn't read the whole article but the \"Borrow\" tip could be especially useful for someone like me. I am in a finacially precarious position not because of The Recession, but rather because I'm a young person just starting out.
Hence (to both of you) why I said those who had the opportunity to save. I know that some people never had the chance to save, I used to be one of them. I've had student loan debt to deal with and my laptop does multiple jobs as stereo, game system and TV and movie screen (with a USB cable adaptor).
Fortunately I've been able to save roughly $800 per month so I will be able to withstand a few punches, but I'd prefer not to tap my savings at all.
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I plan on selling my Consumerist commenting account.
Any bidders?
@backbroken: Can I pay in LOLcats?
@backbroken: Does the account come with the pirate picture or is that extra?