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We're doing pretty well right now but I've been putting every penny I can find into savings and promptly forgetting it exists. If ever there was a time to be building up that 3-12 months' of living expenses, this is it. I just hope it means we can stay okay.
(And if we do get to keep our jobs and everything does keep going well, then it can be the down payment on a first condo / house.)
I wish my house would sell. Been on the market 9 months and zero action. 125 mile commute to my new office isn't fun nor is the wife happy. Thanks for the transfer boss!
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@Onion_Volcano: Lower your price. If it has no offers in 7 to 10 days, it is priced to high. Keep lowering the price until you get offers and sell it.
I lowered my price twice already. I'm not making any money off of it if it sells. The problem is people want to buy my house, but they can't sell theirs either. Really discouraging.
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@Onion_Volcano: the market's tough right now. getting a mortgage isn't easy anymore (not that it should be), but the other big problem is that all of the US is considered a declining market (in terms of appraisals). that makes it hard to get the financing to come in for what people are asking.
& since it's a buyer's market, buyers think they can talk everyone down 20-30% off their asking price, not taking into account that many people have already dropped their price as low as they can go w/o taking a loss.
you know what i'd recommend? is it a good starter home? maybe you're marketing to the wrong people - there's a lot of first time buyers out there right now & a lot of great incentives to get them into a new home (like the home buyer tax credit & exceptionally low rates). perhaps revamp your marketing strategy. get creative. there was a guy near me trying to sell his house on a dirt road - there were a lot of interested buyers, but many were concerned about getting in/out in the winter time. he decided to throw in his 2008 4wd silverado to seal the deal - sold shortly after that (helped that he got local news coverage for his creativity).
also - have you considered offering to pay like the first $5000 of closing costs for a quick close (under 60 days)? that might be enough to get someone to swoop in.
good luck! hope it works out for you soon.
@Onion_Volcano: My house is not on the market as of yet, but I am currently having the same commuting issues you are. I am way too far from my office and really would love to relocate due to expense of commute and personal time I would regain (about 3 hours).
I actually would like to rent for a year or 2 and have my credit settle down a bit since all this madness with the market.
With our investments all paying so little now, we decided to use some of our liquid assets to pay off our mortgage early. Giving up 1% earned to stop paying 6.5% seems to be a good plan our financial adviser agreed with. And without those mortgage payments our saving will recover quickly.
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\"We're sure you know someone who needs a bit of assistance and would be so thankful for your kindness.\"
Like Consumerist [www.donatetoconsumerist.com] :-)
As a college student, this recession has helped me in a good way. I haven't worked since august, so i'm on a fixed budget and with the economy so bad, the price of gas is really cheap. This allows me to make the most of my money since I was spending twice as much before I went to school.
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We're looking to move to a better place to live...sort of. We might pay more money because we're moving close to the city, but we'll save money in that it won't take one of us as long to get to and from work.
If you are doing well: BUY.
Are your wehicles old? You can get 0% financing and a killer price to replace them with maintenence-free wehicles that can last you 10-15 years.
First time housebuyer? Huge discounts and major opportunities including tax credits, starving realtors, and desperate homesellers.
Stock market: Banks, stonger homebuilders and retailors are all suffering.
The key is to buy quality assets at firesale prices and then hang onto them. Don't load the kiddies up and buy cheap crap at Walmart, but durable goods you need would be good.
Also, given the amount of money that the government has pumped into the system, we are likely looking at inflation down the road. Debts incurred now on quality durable goods, locked in at 0% interest, might be payed back with cheaper dollars in a couple of years, but that is not certain.
Just highly likely.
Presuming you are doing well, and your company is not on the rocks or headed for them.
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@theblackdog: He said that new vehicles last 10-15 years not are maintenance-free for 10-15 years. However a lot of higher end manufacturers do offer a certain number of years of no maintenance (including oil changes) on newer cars. The point being that if you're dumping $200-300 per month into maintenance on an older vehicle right now, it might make sense to buy new or CPO since you are effectively getting free money. I'm in the market right now, and BMW is offering 0.9% on CPO vehicle, while Merc is offering 1.9%.
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starrion: I don't have any money to buy. Oh believe me if I did I would!
That is a really cute picture of Wall-E.
@starrion: I wish I had the money to buy...the follies of being young and without much money!
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I'm actually doing well but a poorly timed wedding is absorbing all my extra income...
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@sleze69: I assume you guys started planning this wedding a long time ago - it's not like you could have predicted economic fallout.
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@sleze69: It's good time, from the standpoint of trying to negotiate a deal. The wedding people are probably hurting for gigs.
And don't let your significant other hear you say \"poorly timed\". It's just not worth the fallout! :)
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Human psychology being what it is, we tend to have a morbid fascination with bad news.
There have been several discussions on the Consumerist about unemployment: Official is around 8%; doom/gloomers say the number is closer to 15% if you count the ones who have given up. Yet, even with worst-case-scenario (20%), that means that 4 out of 5 are working.
My wife is doing the 100-mile daily commute (gov't job), and old uncle PS is working two part-time jobs in addition to college at night. We're still struggling to pay bills, yet we have never stopped tithing 10% to charities... even when it really, really hurt.
So, c'mon... can the pessimism; even if you can't find a job, try starting a small business from home (not from a work-at-home website!) in your spare time. Or volunteer. You'll be amazed at the networking opportunities volunteering provides.
Just sayin'...
@gauden44:
You'd be surprised. One of my friends has an online business as a sideline that netted him 11 grand last year. He runs it out of his apartment and has almost no fixed costs. Admittedly, it's JUST a sideline and would in no way support him on its own, but for something he started in college to keep him in pizza money it's worked out pretty well.
Why assume houses are a good thing to buy now just because they're cheaper than before? Looks to me like they're still depreciating, which means it's not yet time to buy. For most of us, a house is such a big investment that you want to make sure prices are down as low as they can get before you buy (I know that might be hard to tell except in retrospect). Pets.com was cheap at 50 when it used to be 100, but you'd still have lost all your money if you got in at 50.
I'd rather wait until after the very bottom in the housing market to buy. Why? Because I'm not worried that prices will shoot up again. Instead, they should just bump around the bottom for a while. I'd rather risk buying just after a bottom (when housing's flat/on its way up slowly) than buy now while prices are still falling pretty significantly.
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Well of course Wall-E has singles to burn. That dude built a sweet Eve seducing bachelor pad out of garbage.
The problem I have with the \"buy while it's down!\" mentality is that it's only good for people who were intending to buy, or who have the money to buy in the first place. If you don't have the money, please don't be like some of the people who got into foreclosure in the first place, and think that you can afford a $300,000 house with $5,000 in the bank. Please don't take that leap because someone may tell you that you can.
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@pecan 3.14159265: I think the real estate agents (many of whom are afraid they might still get subpoenas for their carelessness) and banks (who are going to be reaallll careful lending against real estate for awhile) are going to make it hard, if not impossible, for people who can't afford to buy.
The hubby and I bought a place at well below market because the seller was going through a nasty divorce and needed to sell quick. The hubby has one very stable job and we bought the place based upon his starting salary (recent college grad). Once I go back to work and his income gradually rises, our housing to income ratio will go down. At this point our mortgage, taxes and insurance take up 23% of his take home pay alone. Not too bad for a couple in their 20's. We're planning on staying here for a good long while so it makes sense.
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I'm fortunate to be doing fine (defense contractor). My girlfriend's company (consumer GPS manufacturer) is tanking fast. May end up being a blessing in disguise as she wants to go to school fulltime, getting layed off may prompt that.
Also, if you are over 55, you should still be investing in stocks. How the hell else are you going to recoop your 2008 losses? Bonds? Fat chance.
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I'm actually really interested in getting into the stock market right now. I'm 22 and I have a little disposable income after bills and savings. I'd really love to see an article about Investing 101.
@MonkeySwitch: Specifically invest in the S&P 400 (midcap) and S&P 600 (small cap) indexes. These are more aggressive than the large cap indexes and should give you a better return in the long run than a large cap index. The previous comment on not investing in an actively-traded fund is dead on.
@NitrousO: @MonkeySwitch:
It's pretty simple. Keep your costs as low as possible by investing in index funds. Don't bother with actively managed mutual funds, as they rarely, if ever, beat the market and high costs can eat up most of the gains even if they do. If even that is too complicated, a number of companies offer lifecycle funds that automatically adjust their asset balance based on a projected retirement date. Everyone I know in various aspects of the financial industry will tell you that as an individual investor, picking stocks is for suckers. If the professional stock pickers can't beat the market, the likelihood that you can is pretty minuscule.
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My tips, if you have cash:
1.) Set yourself up with a mortgage with as little money down as humanly possible at a nice low rate. DO NOT pay your mortgage early. That tax subsidy is a big deal moving forward, and any money you borrow now will be at incredibly low rates. The market and government rewarding bare-minimum equity.
2.) If you have a house that you paid off, sell it and get a bigger one with as little down as possible. The market and government are rewarding bare-minimum equity and greater emphasis will soon be placed on tax strategies.
3.) Buy a new car, not a used car. If you have older cars, sell them and buy new ones. The market and government have irrationally overvalued used cars, and some new cars are actually better investments than used ones - particularly hot used models like Civics. If your car is 10 years old or older, give it a few months; subsidies are coming to make new cars an even better deal for you.
4.) When you buy a car, think MPG. Expensive gas is a-comin'.
5.) Become a vegetarian. Exploding grain prices and substantially pricier meat - red meat especially - are a-comin'. I'm already down to fish and chicken eggs only, it's not so bad.
6.) Stop Rothing right now. Income taxes are going to spike, which means you'll be paying more on the way out than on the way in. Use a traditional IRA for right now.
7.) Buy inflation hedges, like commodities. DO NOT buy utilities and \"safe\" investments like treasuries. DO NOT do this yet - commodities have already spiked a bit as the market has gone up. Wait for stocks to test lows.
8.) Invest abroad, but do it carefully. The Chinese export stuff is not what you need to be doing right now. Focus on durables in China as they continue to industrialize.
@ADismalScience: I don't understand this: \"Stop Rothing right now. Income taxes are going to spike, which means you'll be paying more on the way out than on the way in.\" As I understand, in a Roth IRA you pay taxes on the contributions, but the interest and distributions are tax-free.
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@pmw: You do a Roth if you don't think your income tax bracket will change when you retire. So, it's better to pay taxes now while you're in a lower bracket, and earning income from work.
I think DismalScience's point is: if income tax rates go up, it's more likely that you *will* drop a tax bracket when you retire, thus it's better to take the tax deduction now, and pay the taxes at the lower post-retirement rate.
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@ADismalScience: What about if you are upside down on a house? Should I pay the principal down more or just wait for prices to go up?
@ADismalScience: Withdrawals from a Roth IRA, 401(k), or 403(b) are not taxed. Contributions are made after tax and earnings are never taxed. If you think that you will have higher tax rates in retirement than you have now, the Roth investments are the correct ones to make.
@Onion_Volcano: @Onion_Volcano: We had difficulty selling a house eight years ago, and we were really pinched trying to sell it, renting an apartment, and building another. I wrote up a 3- or 4-page Guide/marketing brochure to our home to be given to interested parties. We also tucked them in the brochure box in the yard. Basically, I wrote about the \"user experience\" with our home. I mentioned the perennial daylillies that greeted you when you pulled into the driveway, emphasizing that they required no attention. I focused a lot on the low-maintenance features, and how we utilized the space and features in the home. I also mentioned how the landscaping features changed seasonally so that potential buyers could picture what spring and summer would be like. I made sure to keep the point of view that of the buyer, so that they could put themselves in the home. I cannot say that it was the reason we had an offer within 2 weeks, but I felt better for creating it. I felt I could say I had done everything possible to sell it. With a saturated market, anything you can do to make your home memorable is helpful.
I feel guilty that we are doing so well, a far cry from 18 months ago. I have money in savings for the first time in my life, my cc debt is gone, and I have money left to fund my 401k.
We bought our first house 8 months ago and are paying less for this house than we were for rent on an apt, plus our utilities are way down. I'm able to put the money we are saving into an account to cover house maintenance and repairs.
On the other hand, we've always been poor, so we're just welcoming the rest of the world to our little club of ramen noodle eaters/goodwill shoppers!
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I'm not doing badly...the company I work at has had steady work, and no one is being laid off. My wife still has her part time job. The main problem is we have so much debt (about 8k in credit cards...we both have student loans, she has a car loan, and then we have the mortgage)...I can't see taking money away from a guaranteed return of 10% (paying down credit cards) to a possible return years from now on the stock market. I am saving probably 5% more now than before though...9% towards 401k (including emp contrib), and about 2% into a savings account.
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My wife and I bought a condo back in 2006 (as a home, not an investment). We were both pulling in good salaries. She was diagnosed with cancer, which forced her to leave her job, and forced us to move closer to her family. I now work for a new company (good secure job), and we have our condo rented out to a good tenant. Now my condo HOA is assessing all of the owners in our development $12-$15,000 a piece to replace siding, which is mind-bogglingly ludicrous given the current economic state. Argh.
Despite this assessment and our expensive medical bills (trust me, cancer isn't cheap no matter who you're insured with), we're doing OK somehow. The events of the past few years have put a major dent in our get-out-of-debt plans but what can you do.
So yeah, if you have the spare bucks take advantage of the recession and all the good deals out there.
I maxed out my 2008 Roth with shares of SPY.
blackdog: The auto market has gotten bad enough that some companies are now offering to maintain your car for free for the first few years.
I've made a killing on energy investments in the last few months. And by \"killing\" I mean \"300% return\". If you have some understanding of how the market works, some liquidity, and a strong stomach, you too can weather the ups and downs and (possibly) make some serious cabbage.
There are, of course, no guarantees. I am not a financial adviser and, perhaps more importantly, I am not *your* financial adviser.
@Sean Masters: I bought a $1 scratch ticket and made $10. That's a 900% return, which is three times the money you made, loser.
@pmw: Yeah, I think that's backwards. If you think income tax rates are going to spike, you want to stop putting money in a normal IRA and use a Roth instead.
On the other hand, if you think the \"Fair Tax\" might be implemented, avoid the Roth like the plague. ;)
For a while there, I was a mystery shopper and was able to sucessfully earn a couple of extra dollars ($100 - $200 per month) by mystery shopping for S*bucks and a local hamburger chain. S*bucks was really easy since they paid about $7 a shop * the number of their shops all over the place = $$$.
@drrictus: I think it may depend a bit on where you are in your career. A Roth is a great deal for someone just out of college who's early in their career, because they're likely to still be in a pretty low tax bracket. It may not be as good a deal for someone who's pulling down six figures.
I've actually made a little money investing in Ford and AMD stock earlier in the year when their stock prices were beaten down. When Ford was down to $2 a share it was a great buy, as I figured they were the best positioned of the Big Three, and that they would benefit from Chrysler and GM's troubles. Now that they are up past $5 a share, I wish I had had the money available to buy more shares a few months back.
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We are doing ok. My employer killed the 401k match and I decided to replace it out of my pocket but I'm still putting money into the economy. We replaced our gym memberships with a quality treadmill, hired two contractors to do some work on the house which should bump up the energy efficiency, and my brother-in-law will be getting me a discount on new tires at the shop where he works at.
MEGASTUPID ADVICE Why reflect on what you did right when you did right and still lost?! And \"Continue to invest in the stock market.\" yeah, that was something I did wrong. Even before the market crash, the S+P500 returned ZERO % in a DECADE. Good way to build savings and compound interest! Advice is a joke.
@Trencher93: But how will all of the hardworking American investment bankers make money? You are a little more than an economic terrorist.
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Our finances are rocking now more than ever. Debt-free, 6-month emergency fund in place, renting 'till the nest egg is big enough for the house down payment we'll make in 1-2 years. Living below our means and getting around 25% discretionary income. Got 401k's and Roths streaming for both of us, with portfolios tuned specifically to our strategic goals. Currently investigating Kid #1's ESA, who is 1 year old. Hopefully 17-18 years should provide plenty when she's ready.
Good news doesn't sell advertising for the media. The media will stick with gloom doom and swine flu to scare you all.
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invest in the financial sector. It has to rebound the government won't let it fail. At fire sale prices, it only makes sense.
@Darrone:
AIG turned out to be a good buy @ $.51