How Have Your Finances Changed Since The Downturn?

Time Magazine - What We SpendI’m currently up in the high skies, unfortunately forced to fly United again (no word on whether I’ll be getting charged $75 again for nothing) and for the first time ever I picked up an issue of Time Mag. Granted, it was their special “Money” issue that caught my attention and lured me into picking it up in the first place, but never the less I’d like to think my taste in print are slowly evolving ;)

Check  it: Highlights @ 8 y/o (remember those?), then Maxim @ 21 y/o (I read the articles!!), Money Mag @ 28 y/o, Entrepreneur @ 30 y/o (Also, INC – my new favorite) –> and now TIME @ 31 ½  ;)  But that has nothing to do with today’s topic, haha…

What surprised me was how INTERESTING this stuff is now that I’m an official “adult!”  You actually learn so much! Haha… things I suppose weren’t that exciting back in the day when all I wanted was pretty pictures and farting jokes.  But I digress, again – sorry (First time writing on a plane – it’s kinda weird.  I’m trying to type quietly as to not annoy anyone but I can’t get comfortable enough to sit still.  Not that that has anything to do w/ my going off topic (again) but it’s the truth.  And right now I’m in the mood to blog stream of conscious ;))

All that to really just say, there’s some good MONEY action going on in this issue (Oct 10th) – you should check it out if you can.  Especially if you like polls as much as I do so we can kinda compare ourselves to everyone and see where we land (even though you really shouldn’t do that cuz it’s not a good gauge – but we still do it anyways cuz we’re so curious!).

Here are a bunch of tidbits I caught:

  • Since the downturn, 70% of people have cut back on vacations or entertainment.
  • 40% used college or retirement savings to pay bills.
  • 34% have been unemployed, not by personal choice.
  • 29% borrowed money from family or friends to pay bills.
  • 27% have gone without health insurance.
  • 13%  have been hungry because they could not afford food :(
  • 7% have lost their home because they could not afford their rent or mortgage

How scary is that?? Just within the past 2-3 years too – it’s kinda hard to believe.  Though I’m sure if you polled people before the crash they’d have some pretty sad situations then too.  It’s not like it’s ever *perfect* right? Anyways though, here were my thoughts on it.  Or rather – me comparing myself to it cuz I think it’s interesting.  Feel free to to do the same afterward!

VACATIONS:   I don’t really fall into this category lately, as my traveling is starting to get a bit ridiculous, haha… though it is, actually, “work.”  I just happen to think that’s the same thing as vacation sometimes ;)  I do think if I ran the numers though, that I HAVE cut down a lot on my outside vacations and/or entertainment over the years.  Not really an effect from the economy, but rather cuz I got addicted to this so called personal finance bizness.  And once you go finance, you never go back! (Bah dum-ching.  Would have been better if it rhymed, huh?)

COLLEGE $$: This one REALLY shocks me.  That’s almost HALF the people surveyed!  Digging into their retirement to pay bills!! Wow… it’s crazy cuz I can’t even imagine that anymore. Back in the day I prob. would have done that cuz I wasn’t too good on holding on to my money much outside of a $500 or so in my savings account, but jeez.  Sometimes you have to do what you have to do, eh? If only we had these epiphanies much earlier on in our lives before the madness hits :(

UNEMPLOYED: Another scary tidbit!  Even I was scared when I got laid off, and I WANTED to be out of that place when it was happening!  Haha… it def. does a number on your mind, alright. I feel bad for those who can’t pick up work as fast as they used to.  If any of you are out there reading this right now, check out our Side Hustle Series!  Maybe you’ll find some good ideas?

BORROWING MONEY: Yep!  I’ve been on both sides of that over the past couple of years too – helping others out, and also being helped out myself (though that was more for investment reasons than paying off my utilities).

NO HEALTH INSURANCE: I think we all know the answer to that ;) I was without it only about 25-30 days, but I def. fell for that one… had to make my *first* $300 payment the other day and I’m not gonna lie – it sucked!  And made me wish I was sick just so I would feel good about using the dang thing, haha… that’s a horrible way to think about it, huh? Gotta keep remembering why it’s important to have, cuz ya just really never know out there!

HUNGER:  This is the worst.  I’m not even gonna try to pretend I could understand this one cuz I’ve never been anywhere near that scenario… so sad to think most of us live our days pretty safe and sound, and others – even right next door – could be starving :(  And that’s just in OUR country.  All those poor kids overseas???  It’s horrible.  Remember to count your blessings every now and then!

LOST HOME:  That 7% looks low, but man – that’s like one out of every 13 people out there!  Think about how many friends and family you have, and what those odds really mean… I met over 200 bloggers this weekend at FINCON, which means that roughly 14 of them have lost their roof at some point over the past few years!  Though the odds of them specifically doing that are low, considering they were all PF bloggers ;)  But you get the point.  It’s def. not good.

It also went on to say that 2/3rds of us would take a pay cut to keep our jobs too.  And that I def.  have first hand experience with.  Not only did I joke around earlier blog about taking a 10% cut if it meant saving one of my colleagues (I decided back then that I *would*), but a mere 12 or 15 months later I actually DID get forced to drop 10% of my pay!  And it def. wasn’t to save anyone!  6 months later most of us were all axed anyways… But it’s funny how you still figure out a way to survive and pay the bills once you’re forced to have to do it ;)  If only we’d pay attention EARLIER ON, and get that game plan in motion much much faster so we wouldn’t have to scramble all the time!  That would be the life… now if only everyone would listen to us ;)

Speaking of listening, the ol’ capitan just announced something about landing and portable electronics (which always reminds me of “potent potables” from Jeopardy, hah!) so I better go.  I hope you all had a great last week, and I’m excited to be back to our regularly scheduled programming again!  We’ll catch ya on the ground, my friends.

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23 Comments

  1. Jenn October 4, 2011 at 7:35 AM

    At this point, I don’t think I’d take a paycut to save this job, but I’d sure take one to get a new one. (This one feels like a ticking time bomb already). That’s something I wouldn’t have considered before.

    Reply
  2. Eric October 4, 2011 at 8:02 AM

    Just to add to you Jeopardy comment…

    I always will remember: “anal bum cover”

    AND

    The sound a dog makes (stumped contestants…)
    Trebek: Rough.
    Ferrell/Connery: Aha, just the way your mother likes it, Trebek!

    That is all… :)

    Reply
  3. Molly October 4, 2011 at 8:39 AM

    Both my husband and I got laid off recently. The good news is because we had cut back on our expenses we aren’t fretting over it. We can live on the unemployment insurance without borrowing from our savings. It puts our savings/retirement goals on hold but it’s just temporary!

    Reply
  4. 20's Finances October 4, 2011 at 8:55 AM

    It is crazy to think about how everything has changed. People are spending less on vacations. My wife and I decided to drive close by to a lake and rent a cabin (instead of going abroad) and when we were there, what is normally a popular place came to be a semi-abandoned area. A couple local business people indicated to me that this years numbers were drastically lower than previous years.

    Reply
  5. LB October 4, 2011 at 10:34 AM

    2-3 years ago during the rough times I couldn’t afford to drive any extra places. I couldn’t go to the store for a missed item, let alone take any sort of vacation.

    College and retirement- Fuck that. There was no way in hell I was touching those accounts. No one will take care of me in my old age and college is the only dream I would never, ever give up. Ok, not totally true, if I ever needed a more permanent, government assistance, I would have to give a lot of that money up… sad

    Unemployed-multiple times including husband. Before, I had a side business I gave up for personal reasons. Found a part-time, below minimum wage job, because no one wanted to higher someone who had a business, because like they said I will just want to start another one. Then husband lost his job, a couple of times.

    Borrowing money- thank god one of my husband’s relatives gave us a gift that helped bring down some of our monthly expenses. It was a loan, but she never would take the money back. I keep trying to do nice things for her, but since she is retired with a very nice pension, nothing I can do will make up for it. Maybe I can name my first born after her :)

    Health insurance- Cobra is a nice thing, but at times it cost 800 – 900 dollars a month and we had to pay for it. One of my husbands medicines is $2000 without insurance.

    Hunger- when I had my part-time, less than minimum wage paying job, we got scared. I mean why wouldn’t even fast food hire, oh yeah same sort of reasons, because once we got something better we would leave. We had small savings accounts, so we could only get an emergency food box and not actual help with electricity or anything, but that helped in so many ways. I will always be in debt to the people who helped that day. I cried the whole way home, knowing we were OK, just OK.

    Lost Home- Thanks to my husband’s relatives donation to us, we did not lose our home. I was preparing for that scenario and had emergency procedures, but we never missed a single payment, and most recently paid it off fully. Homelessness is scary.

    Oh yeah and did I mention I am fully debt free bitches! HA! I am waiting for one more bill and then I will be posting that on one on Facebook. Can’t wait for the reactions. I mean look at what I went through 2-3 years ago and now I can pay for college with cash and at this moment am not working for the man. Am doing some side jobs, but looking to concentrate on school, heal fully from my surgery, and hopefully start a side business again. Hey J. Money if you ever want some help with your business, let me know ;)

    Reply
  6. Money Beagle October 4, 2011 at 11:54 AM

    Thankfully, I haven’t gotten laid off nor have we lost anything big. Our biggest impact has been having to tighten our belts over and over again. I’ve not had a raise in over two years, our health premiums have more than doubled and we’ve added two kids to the family. Still, compared to many, we know we’re still in pretty good shape.

    Reply
  7. Maria Nedeva October 4, 2011 at 12:05 PM

    J$, nice to have you back. Glad you enjoyed the FINCON – the Universe willing next year I’ll be there. As to the question you ask: the news is no better on this side of the Atlantic. In fact, I suspect for us here it is worse because, in the the UK in particular, we have to make much more dramatic change. We didn’t need to save for our children’s education but now a year’s university fee is set at £9,000; we didn’t need to pay for health care but now the National Health Service is dying a painful although fast death.

    Personally, we did get in a financial pickle but then this is probably a blessing – if not I would have never learned anything about money which fascinates me. We had to ‘borrow to pay’ but we have paid a large amount back and our net worth has been growing. Focusing on developing passive income streams – and yes, I do get royalties but from academic books this is enough for a nice coffee in a coffee bar. Well, it is a bit more than that but nothing to get excited about.

    We do vacations but have changed the way in which this is done – no large hotels, yes to borrowing friends holiday houses; this is how we go skiing, for instance.

    Yes, out life has changed, but its quality is if anything ever so slightly hogher.

    Reply
  8. J. Money October 4, 2011 at 1:22 PM

    @Jenn – Oh wow, well that doesn’t sound fun. Have you started looking around and getting a good feel for what’s out there these days? Maybe you’ll find something amazing to get excited for! :)
    @Eric – Ahahahaa… I miss those skits!!
    @Molly – You got that right! It is only *temporary* – we all go through phases (both good, and bad) and we get stronger as we push on :) You guys are smart to have had a good underlying structure going on – hope you find some great jobs soon! (If you’re looking)
    @20’s Finances – I bet that was freaky! I wonder how long it’ll take for the new “normal” to be “normal?” It’s nice you guys were able to take a vacay at least :)
    @LB – WOW!!! GOOD FOR YOU bitch!!! Haha… I almost spilled my coffee on that one ;) But just super impressive, wow… I totally want in on your next biz too ;) If you ever like talking ideas out, or having people try and break them for you (I’m good at that) def. give a shout. I could talk about that stuff all day long, and have a good 100+ ideas to “one day” try, haha… it’s fun! (Also, if you ever want to share your story from start to finish, and you like writing, let me know and we can talk about the possibility of you doing a guest post here. It would be inspiring!)
    @Money Beagle – I LOVE your positivity! That is such a great quality to have. It’s easy for any of us to get down and feel sorry for ourselves, but to accept and really OWN your situation like that is brilliant. Thanks for sharing :)
    @Maria Nedeva – Awwww that’s great! Scary as hell w/ tuition and health insurance stuff though – I had no idea! Everyone here in the States just says “I wish I lived overseas to get unlimited free health care! They’re so lucky!!” w/out thinking of anything else ;) I know, cuz I used to do that too! haha… but I do hope things get better, for both you guys and you country. At the end of the day we’re all people, and we’re all in this life together. Thanks for stopping by my Maria!

    Reply
  9. Jen @ Master the Art of Saving October 4, 2011 at 1:25 PM

    I’ve been (and pretty much still am) laid off and don’t have health insurance. But when I look at the other stuff people are going through, I still feel grateful. There is always somebody else worse off. :-( I think it’s more about the choices we’ve made than the economy for us.

    Reply
  10. Jeffrey Trull October 4, 2011 at 1:39 PM

    J$, it’s even better reading this post today now that we’ve met! I’m still thinking about how great FINCON was and what’s in store for next year.

    This is a sad/scary list, and it’s hard to pick out which one makes me feel the worst. All the starts are startling, especially the hunger. We, as bloggers, as individuals, and as a country, have to do better to make sure this kind of stuff doesn’t happen.

    Reply
  11. MD October 4, 2011 at 2:21 PM

    I like how you’re use “eh?” after spending a weekend with a Canadian lol.

    The vacation cutback is unfortunate. All of us are already busy enough and we deserve sometime off to relax and recharge our batteries.

    Borrowing money from friends is sad. Nobody wants to do this. I can’t believe how many people have been forced into it.

    Reply
  12. Evan H. October 4, 2011 at 2:26 PM

    In early 2008, my wife and I made a decision to take Dave Ramsey’s Financial Peace University. During that downturn, we paid off $35,000 in credit card, student loan, and car debt. We have stable jobs and recognize that we are very blessed to be employed and live in a beautiful area of California. We’ve built ourselves a nice cushion but we just need to keep stacking that $$!

    We are also very blessed to not have had to do anything on that list.

    Reply
  13. Courtney October 4, 2011 at 5:49 PM

    I just read that Time article this morning, and it was even more depressing than I expected. The part that really hit me was the section where they surveyed people on when they thought the economy would finally turn around, and the biggest chunk (something like 25%, I think) actually said they think we’re still in for a long-term DECLINE. I’m trying to keep my expectations low and just learn to live comfortably with what I have (without counting on anything improving in the visible future), since the light at the end of the tunnel is looking pretty distant…

    Reply
  14. J. Money October 5, 2011 at 9:26 AM

    @Jen @ Master the Art of Saving – Most def. People always have it worse off than us :(
    @Jeffrey Trull – Agreed! Really really glad we got to meet in real life my man :) If you ever need anything at all just let me know okay? I’m on a mission this year to help as many people as I can, so you’ll never bother me!
    @MD – Haha, dude – my accent is ALL jacked up this week! I think it is from FINCON – we had Canadians there, Australians, even people from Israel! I pick up a little of it every time I travel and love it ;) All these different cultures fascinate me.
    @Evan H. – NICE!!! That’s what I like to hear! Even in such mess, it’s still possible to come out and kill it! Way to go both of you. You’re an inspiration :)
    @Courtney – Oh cool! Great issue, huh? I agree on outlook — we’re just trying to lower all our expenses no matter what’s going on all around us, so one day we can do whatever we want w/out much worry. We don’t always have control of what’s gonna happen in the markets/politics/etc, but we sure do on our OWN household economy! Gotta rock that until you’re floating along nicely ;)

    Reply
  15. Sharon V October 5, 2011 at 11:54 AM

    My BF and I had to borrow, we were temps from 2008 to 2010, so we were often unemployed, but ineligible for gov’t retraining help. We never went hungry, but we weren’t eating high quality either. Through it all, we were aware that we were fortuneate. Other temps we worked with were in much worse situations, but there seemed to be a vast difference in attitudes. Some were scared and despondent, others were optimistic that it was all temporary. The manufacturing sector was starting to imporve by the time we left Ontario, so I know the optimistic ones were able to do better faster.

    Reply
  16. Elle@Odd Cents October 5, 2011 at 9:22 PM

    I’m not even sure I should be posting on this one. I haven’t really been affected by the down turn, but even before there was talk of a recession, I made some serious cutbacks in my spending:

    Vacation: I don’t have a choice but to take a couple trips a year, because I’m in a long distance relationship.
    College: The majority of Caribbean people benefit from free undergraduate studies at the University of the West Indies campuses. So many of us start jobs virtually debt-free. I’m doing an MBA now and i decided to pay per course which allows me to save money each month.
    Unemployed: Thankfully I’ve never experienced this, but I have friends that were unemployed for long periods. Lots of people forget that there is a psychological side to it. Not being able to support your family can take a toll and make you depressed.
    Borrowed money: I’ve never done this.
    No health insurance: So far, all of my jobs have had health insurance plans.
    Hunger: I’ve never experienced this. It’s heartbreaking to know that so many people need food, whilst it’s being wasted in some places.
    Lost home: I don’t know what this feels like either. I can see that it’s happening in the USA very frequently and easily. I’ve read lots of stories of financial institutions ripping off people and getting away with it.
    Taking a pay cut: Not sure about this one….

    Reply
  17. Edward Antrobus October 6, 2011 at 12:00 AM

    Vacation: I took my first vacation of my adult life this past January.
    Retirement savings. I haven’t contributed a dime into my IRA since 2009. Yeah, paying the bills today is more important to me than paying the bills tomorrow. But, if social security is still around in 40 years, we actually already have enough without putting in another dime.
    Original unemployment was me, moving across country. Took 8 months to find a job. Laid off 4 months later. Took another 8 months.
    We borrowed the down payment for my wife’s car. Just finished paying it back in July, a year later. We got a car for my wife so we could look in a larger area for an apartment.
    Actually, I didn’t have health insurance UNTIL the recession. Never had it a day in my life until I got married 2 years ago.
    I’ve been hungry. The worst part was when the county said we made $50/month too much to qualify for food stamps.
    We did loose our place, but not because of inability to pay. The rental company just decided they didn’t want to rent to us any more. Have any idea how hard it is to get a place 6 months after a bankruptcy?
    Pay cut, I would totally do, if I had to. Unfortunately, my current employer is probably going to expect me to take a pay cut AND travel further next summer. I don’t think I can manage both.

    Reply
  18. J. Money October 6, 2011 at 6:20 PM

    @Sharon V – Oh yeah, the longer you can stay optimistic the better chance (I feel) you can overcome it and really kill it again. I don’t mind people whining and feeling bad for themselves for a while – we all get to do that in shitty situations – but after a while it starts to take you lower and lower if you don’t OWN it and really fight to get back on top. I was pretty miserable after college (used to be the best years of my life!) and once I snapped out of it and focused on making even BETTER years, I magically started living them ;) Positivity does wonders!
    @Elle@Odd Cents – You’re very fortunate! :) And I’m glad you shared your views too – I think it all helps to put thing in pespective no matter where we live, and what our current financial status is. So thanks!
    @Edward Antrobus – Oh wow, that’s harsh on so many levels! $50 too much?? Finding a home after bankruptcy?? I’m sorry to hear man :( That’s no fun at all… on the plus side you really carry yourself well online! I always see you as such a positive and smart person, so that’s good! :)

    Reply
  19. Natalie @ Mango October 7, 2011 at 4:13 PM

    That is scary. We see these numbers over and over, and yet somehow, until you are in that situation, or know somebody who is, they remain just that: numbers! But even if we haven’t lost a home or a job, cutting back is something that most of us have grown familiar with lately. Especially on vacations! (Except for you, J. Money– we know you’re “working.” :o) At Mango Money we have a great post on how to *save* on vacations, so you won’t have to cut them out altogether. After all, everyone needs a bit of a reward every once and a while! http://www.mangomoney.com/blog/blog/mango’s-top-10-ways-to-save-on-summer-vacations

    Reply
  20. J. Money October 9, 2011 at 11:29 AM

    Hah! I’m the master of “working” and “playing” at the same time — isn’t that what we all want in life? ;)

    Reply
  21. LB October 10, 2011 at 9:46 AM

    I would totally do a guest post for you! Maybe if I can ever come up with a concrete idea for my own blog I could start writing more :)

    Reply
  22. Ron Stevens October 10, 2011 at 6:39 PM

    This are the times that people should start looking for better ideas and make the right choice, is not easy to loose your house or your car, those are the things that are very important in our daily life. A few years a go i took a big step in which i decide to invest in gold if i remember correctly gold was around 400 by the year 2004. so i made a few research and look into a few websites in which i got in contact with. http://www.GoldPrice.net/ and now gold is about $1600.00 just think how much i made just by investing 150k on gold when it was $400.00 back then?

    Reply
  23. J. Money October 10, 2011 at 9:27 PM

    @LB – Hell yeah! And if we do one here first, you’ll get a feeling for how it’s like when some eyeballs are staring at it :) Shoot me an email whenev: j (at) budgets are sexy (dot) com
    @Ron Stevens – Woulda been nice! Though there’s a lot of good stuff we could do if we could predict the future ;)

    Reply

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