Saturday, September 20, 2008

What are you doing with your money now?



-Are you spending as usual?

-Have you stopped spending?

-Have you bought anything non-essential that cost more than $200 in the past week?

-Where is your money? (One account, many accounts?) Were you concerned if it was insured?

-Are you spending on any big projects around the home?

-How freaked out are you, if at all?


The week of headlines was bad enough, but THIS is pretty sobering, too:

WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

36 comments:

Anonymous said...

-I am spending a bit less than usual, but I don't really need anything major right now.

-Have you bought anything non-essential that cost more than $200 in the past week? Yes, Bose noise-canceling headset, completely unnecessary.

-Where is your money? (One account, many accounts?) Were you concerned if it was insured? No, I have less than $100k, to be honest.

-Are you spending on any big projects around the home? I need wood floors and am doing that next year.

-How freaked out are you, if at all? Somewhat, but I'm a long way from retirement, and my spouse has an ironclad secure job. (Military.)

Anonymous said...

I bought a pair of $400 Calleen Cordero sandals. I'm ashamed. But damn, they're incredible.

I have funds in a Vanguard money market, and I'm contemplating pulling them out.

We are nearly finished painting the exterior, and planned to start landscaping and hardscaping the exterior this fall. That may be cancelled.

I'm so freaked out, I think I may be getting an ulcer. I wish we hadn't bought our house last year. What's that about hindsight...

Anonymous said...

I am spending as usual, which is not much; I'm just not a shopper. Unfortunate, as this seems to be what the US economy is based on (conspicuous consumption).

I bought the Taj Mahal Lego set for my son's birthday ($300). It's kewl. Helping to keep that ole US of A going strong.

My money is all in FDIC insured CD's, properly titled. I can't tell you how many bank managers wanted me to invest in their crap mutual funds this year. Tell me something I don't already know, dudes.

I need big projects done, but it's such a hassle, when the talent is so inconsistent. That means you, Landscaper-man-who-sends-illegal-immigrants.

I am not so much freaked out, as disgusted. Everyone is too greedy. Everyone needs to feel 'rich'. Why can't people feel satisfied with what they can actually afford?

Fuck.

Kristin said...

I just became the manager of my apartment building, so I get free rent and a little extra money. That has helped me and my man out a lot. It was his birthday this week and he really wanted the new iPod Touch, so I spent $400 to get him that. I have about $25k in a money market account with my broker. My understanding is that it's insured, but I could be incredibly wrong about that. I just talked to my broker (he's my late father's best friend) and he didn't say anything about it, so I think everything is fine. I should probably get clarification on that, huh? We also have about $10k in a savings account. We don't own anything and are just plugging away to get rid of consumer debt and establish a good savings for our wedding and eventual portfolio. Maybe we'll buy property once the prices drop and are actually affordable! My birthday is coming up, so I think I'll ask my fiance for the Taj Mahal Lego set. Seriously! I've always wanted one of those Lego buildings. Is it awesome? On the home front, I desperately want to convert two awful alcoves in my living room into much needed bookshelves, but that requires more than what I can physically do. As I rent, I can't really justify getting someone in here to install built-ins. So my living room looks like shit. :( I want! It's the American way!

David said...

I'm saving for vacation next month, so other than some clothes and a sah-weet pair of Mark Nason boots (on sale) I've not really bought anything.

I'm mildly freaked by the whole situation. My booth at the antique mall usually sells a few little things each 2 week period, and this last period, not one thing has sold. I think people are finally scared.

I've got no investments to speak of, buy my retired mother has lots. Her investment income pays the mortgage on the huge new house on a lake she just had to build, I'm praying she's ok.

modernemama said...

you think that NYT article is bad? Well, check this out.
We're doomed, doomed I tell you...

Be the change..... said...

Admittedly i'm very freaked out. I've been very frugal the past few weeks; major cutbacks on spending. Unfortunately, before I was freaked out I was just nervous -which makes me shop,UGH! I bought a few sweaters and winter clothing items but did not remove the tags (because of being nervous): I may end up returning them! Everyday I go to work scared that I'll loose my job even though we seem to be doing fine -this is not cool!

Anonymous said...

The WSJ guy on Bill Maher's show last night officially freaked me out. I'm cutting way back. But you know, I needed to anyway. Probably like most of us.

hello gorgeous said...
This comment has been removed by the author.
Anonymous said...

i'm spending a whole lot less and it's kind of nice actually. however, my current job situation is forcing me to do it.

Anonymous said...

Sadly many freaked out this week and stayed home. Our normally busy restaurant has been very quiet. Our wait staff, bartenders, and dishwashers were sent home early to do what the rest of us are doing: worry.
The last time it was this slow were the days following 9/11.

Pickle said...

We're all cutting back, but it's relative. So we're not dining out on $90 per person sushi or being fit for new $700 suits. We're going to be OK despite the "catastrophe" we have been born into. Most of us have a roof over our heads and food on the table, yet the news people are crying famine? Please. Things are terse but not dire and in a year this "suffering" will all be cocktail fodder.

Anonymous said...

I was at a dinner party with a lot of high-fliers last week and we got to talking about money, etc. Everyone was whining about having to cut back, which means very little in literal terms.

They think that they can't make do on less than $100k barebones a year. I pointed out that compared to 95% of the US population would think that is wealthy. It's all in what your perspective is...

$400 shoes? Many people have to feed a family of four on that for a month and could never comprehend spending that much on one pair of shoes.

$300 kewl Lego? Many people have to go to the dollar store or goodwill to get their kids presents. Somehow, I doubt that Legos are made in the old US of A, so you're really helping China. Did you pay cash or put it on a credit card? If credit card, it's helping China.

$400 Ipod? That's what some people are going to pay in utilities each month this winter and that's with cutting the heat way back.

Kristin said...

Anon 6:43, thanks for your attempt at scathing criticism. For your information, I saved for months to purchase that iPod and have worked 2-3 jobs to get it. I make due on a salary that's less than $25k a year being a social worker. I save my money, and I'll spend it occasionally. I give money to charity. So pass judgment at your dinner parties if you see so fit, but fuck off when it comes to me.

Kristin said...

P.S. I don't live off of my fiance, either. He's a grad student.

AK said...

No big purchases for us. We are postponing our house hunting because my husband is very nervous about his job future. Before making a purchase now I always ask myself if I really need it. Still splurging on weekly fresh flowers for the home and UK and AUS decor mags though.No new shoes/ bags.

amymezzell said...

We honestly haven't changed any spending habits. Because of the housing market, we just started looking for a new house. If those things make it sound like we have enough money to not be worried, that's not the case. Combined, we don't even bring home 50K; we're just lucky to know how to not live beyond our means, and we're doing better than all our friends our age (mid-20s). To answer your question, we did purchase the hub a new wakeboard this week, which was around $600, but he used birthday money on it, so it kind of doesn't count. The CDs that cashed in this summer were just put down as extra on the mortgage's instead of putting them back into a new CD because no interest rate is worth it right now.

Anonymous said...

i feel bad for the people who've been burned by this crisis, but I'm doing well. I was frugal, frugal, frugal during the boom times, and now I'm able to enjoy a few of the yummy things that others are cutting back on. I'm not a big shopper in general, though; more stuff = more maintenance, more headaches, less space.

Until less than a month ago, I had only about 30% of my savings in equities because it was clear what lay ahead. Have been on a bit of a spending spree last 2 weeks, picking up solid stock here and there at great prices that was unloaded by panicked sellers. Still, not buying too much... another few lurches are definitely coming soon, and I want to keep plenty of liquidity to pick up some bargains then, too.

Yesterday I acquired a buttery pair of Loeffler Randal shoes on deep discount - but they totalled over $200 when tax was added.

Anonymous said...

anon 6:43--

Next time you comment, you could try having an original thought.

Simone said...

we've always lived simply and thank goodness for that. i plan to live my life as i'd always hoped to live it - within my means and well.

however, if i was a pessimistic, i'd be using my money to light my firepit as it's all going up in flames. but, i'm an optimist.

Anonymous said...

I am spending about the same.

I am all for DAVE RAMSEY (talk-radio) having a session on the floor of the US CONGRESS. It would be cheaper for us to pay for it since we're paying for everything anyhow. It's time to do a budget folks

Anonymous said...

Not only am I not spending anything. I'm saving every penny I can.

The only way not to be completely fucking freaking out is to be completely fucking in the dark!

Wake up people! This is HUGE!

Julia said...

I think we're spending more if that's possible. Went out for a decadent anniversary dinner, and bought a bike (to be athletic more than to be green), and my husband got me a cute bracelet for my birthday this week. So...

The things that are going on are serious, but the media has a way of causing some people to spaz out, usually the people who don't follow the market anyway.

Anonymous said...

The new Diet Pepsi Max ads have coined the phase of the week: “Wake Up People.” Anon 10:20 used it too. Bravo!

This is not a burp in the stock market. This is our financial system on the verge of a nuclear melt down. It’s not hyperbole. It’s reality. It’s a $700 billion bailout. That’s with a “B” folks.

I think the vast majority of the American public doesn’t understand the basic fuels that fire our economy. I don’t think they’ve had to either; the ride has been a smooth one for so long. All the average Joe had to know was: don’t max out your credit cards, fully fund your 401K, diversify, and money market accounts are predictable and safe.

Well not any more.

Kristin… you sound like a lovely young woman who is trying to make sound financial decisions, but please don’t mistake your broker’s silence for good news.

Money Market Funds have always been the Mr. Safety of the investment world, but they are NOT insured. In fact there is a lot of fear and concern around Money Market Funds right now, with some high profile economists predicting a possible run on the funds. You might want to read about how money market funds really work. The Financial Times has a great interactive explanation.

Sorry I couldn't create the link...

http://www.ft.com/cms/s/0/a830736a-8585-11dd-a1ac-0000779fd18c,dwp_uuid=11f94e6e-7e94-11dd-b1af-000077b07658.html

Kristin said...

Thanks for the advice, anon 4:49. I'm calling him in the morning. All of the info I scratched up told me that it was safe, but I have no clue if it's true or not.

Kristin said...

http://www.huffingtonpost.com/robert-kuttner/calling-paulsons-bluff_b_128075.html

This freaks me out a bit.

AT said...

Well I got laid off about a month ago, so I haven't been spending money on anything except food lately. Unemployment pays bupkis. And none of my freelance gigs have paid up yet.

However, if I DID have a job, I'm sure I'd be spending money as usual, so all you people who spent more than $200 in the past week on something non-essential who I sorta hate right now, don't feel bad. I'm one job away from being like you again.

Actually, that's not totally true. I'm in publishing, so I don't think I've spent more that $200 on something non-essential in my life. (FYI - Publishing pays bupkis too.)

Carrie said...

All I have is 10K in savings and 3K in stocks, so I'm not too worried about anything other than a complete financial collapse (but I am worried about that). My folks are getting close to retirement, though, so I worry about them a little. Mostly because they aren't worrying.

I'm worried about my office too, because no one here is worrying either. We're a nonprofit, so all our money comes from foundations and donations, which means there's a very good chance we're heading for lean times, and we're hiring new staff and talking about big, expensive video projects. It is dumb. I told my boss that, but I don't think it helped.

Anonymous said...

What money. My salary(I'm an artist) vanished this summer. So I'm looking for work with a health insurance plan. I never could afford $400 shoes and I have eaten out only once this year, but I'll be spending a huge chunk of savings on heating oil this winter with no option out of it. And for all you fellow smug anons, I've insulated, only heat three rooms to 62 and rent what I can out. And in my area, I'm one of the prosperous ones. I know some of my neighbors will burn their houses down and others will become ill because of poor heating choices. I know the hurricanes are terrible down south, but the winters here have their own penalties. And yes the stock market disasters had a direct effect on my income actually. Art, as with home decor is a luxury good.

Anonymous said...

Anon 6:43--

So what?

Loads of people live on less than $1 a day, work in appalling conditions and don't have the internet. Does that mean we all have to?

Some people spend millions of dollars a day, don't work and post to blogs all day. Does that mean we all have to?

And no one is "helping" China. If they've been clever enough to set things up so they profit off the spending of other countries, good on them. God knows the USA has and no one bitches about them (well, that's a lie but you take my point).

Lowest common denominator thinking doesn't help anyone.

Anonymous said...

Anon 7:32, there are federal programs to help with heating costs. There are probably state and local programs where you live, too. If you have little to no income, then you would surely qualify. I suggest contacting whatever government agency in your area that handles social services and inquiring about heat assistance. Do it soon, though, because there may be have cutoff dates for applications, or if there aren't deadlines, sometimes those who apply early get the most assistance. Some of the ideas proposed for the massive bailout also include putting more money into heat assistance. There will probably be a sizable chunk of money that you should take advantage of. Maybe switching to electric space heaters would help. My apartment building was pouring obscene amounts of money into heating oil and it switched to tiny electric wall heaters. My heating cost went down tremendously, and I feel just as warm. Best of luck!

andrea of ffft said...

pickle, people like you scare me. Most of the people in your country are indeed starving, and don't actually have decent roofs over their, or their children's, heads. The reality is that if you are so arrogant as to assume that the majority live like you and are cutting back on "sushi" to feel like they are doing their part, you need to travel around a bit (not on a plane, but actually visit the east end of wherever you live) and see reality up close. It isn't pretty and I would suggest leaving your $700 suits in the closet. You might feel a tad out of place.

Kristin, I read your first post the same way Anon 6:43 did. I think you were trying to be funny and make light of it, but it's not really that funny. If you work two to three jobs to pay for the expensive lego, you maybe want to point that out in the beginning otherwise you gave the impression that you are flippant. Don't rip their head off because they are pointing out what some people are obviously oblivious of (see previous paragraph).

It is a scary reality, but it's a reality that is needed right now because it isn't just wall street that is changing, the change is global and it isn't just going to blow over. We MUST start living differently NOW because we have built a rather Romanesque situation and when the whole thing topples, those who are wearing their blinders will fall the hardest.

Kristin said...

The questions that Decorno asked were "how freaked out are you" and "have you bought anything that cost more than $200 in the past week." She was asking to get a feel for how people are actually living with this economic crisis looming overhead. One of the biggest aspects of the crisis is consumer fear. The borrowing ratio of these firms is the most despicable part, but the entire global economy will falter if people don't spend because capital can't be raised. Businesses won't be able to function. Why do you think the U.S. government did a stimulus package? It's not to just give people money; it's so they will spend it and keep money flowing to businesses who need cash flow to survive. Off the cuff, I would argue that our entire system of consumer spending wouldn't topple if the financial sector wasn't taking inappropriate risks with lending, but we can talk about the dangers of a capitalism system dependent on credit another day because that topic is too big to address here. Basically, stop implying that people are bad and scary just because they answered Decorno's questions honestly and said that they bought a pair of shoes or a new toy or are eating less expensive food.

I was reacting to the fact that Anon 5:43 set herself up as the person who had to educate the "whiny high-flyers" who don't know the "literal" meaning of things to establish her role in this conversation as the person to show us correct, true perspective. It was insulting.

And I wasn't trying to be funny. I've never said a funny thing in my life, unfortunately. I really want a Lego building! A secret wish from childhood, I suppose. I believe that I mentioned that I just got a second job that's helped me out a lot, but the second status might not have been clear. But even if it wasn't, that's no reason for strangers to lecture each other about buying an iPod.

The Sale Rack said...

i started thesalerack.blogspot.com to help me save money! Spend less!

Mary T. said...

I am really freaked out. But I read a lot. I know a lot of people who don't read that much. They don't seem as freaked out. What really got me there? This article:
http://tiny.cc/idXv9

Unfortunately, we just paid a lot of money for a fence for our yard. We had to -- two dogs, and we'd already put it off for months. But it has not been fun since then. Other than that, we've drastically cut back on how much we eat out (we would be happy never to cook ever) and I now officially feel guilty that I help run a decor blog. Sigh.

Christine in DC said...

I'm a little freaked, but then I realized freaking doesn't help and reading doomsday story after doomsday story doesn't help even if its true. So I go to work, hope the company will do well enough for me to keep my job, and live within my means, but nothing's really changed there. I don't know if I've spent over $200 on any non-essential thing in the past 2 months or more. at least not off the top of my head. I did criticize myself for eating out last Friday night, but I think I spent $30 total.

I have some $ in a savings account, not much, about $14k, and a 401k and IRA with mutual funds. Not guaranteed, but pulling any of that out would probably just be silly. And put it where? I have thought about reducing my contribution and putting that into my short term savings and CDs.

No big projects or expenses on the horzion. I rent, so my biggest recent project involved putting shelves up in my closet which cost $50.