Boston Gal's Open Wallet

This article struck a nerve with me. In February, my husband and I were able to pay off our cars and credit card debt thanks to a great bonus my husband received. Had that not happened, we would be very strapped for cash. We freed up approximately $2000 in cash by doing so. However, our gasoline bill has doubled and food for a family of six has become a huge chunk. We have more savings goals, but I can honestly say that out of the $2000 freed up, about $500.00 of that is now needed for everyday bills. We are still doing okay, but we are definitely weary of spending any money frivously.

 

I think a lot of the strapped feeling consumers are feeling has to do with their own lack of "margin." We've all noticed that our home values have decreased (well, maybe not everyone's), and gas and food have gone up a lot. If we were depending on our home equity lines to fund part of our lifestyles, and we now can't or won't borrow more against that equity, we'll feel the pinch. And if we decide to halt the credit card spending (perhaps due to watching our stocks lose value?), and then attempt to start paying more than the minimum every month, that's going to pinch, too.

In contrast, for folks who have no consumer or HELOC debt and were saving a bunch before all these economic woes hit us at once, they might only have to pull back on their savings a bit to notice no difference to their budget.

We happened to have some debt when all this hit. (Putting the last child through college and paying for daughter's wedding.) We've redoubled our efforts to get out of debt during this time (almost done!), so we've felt the pinch. Once we're out of debt this time, we'll have safeguards in place so that we're not always choosing between a gallon of milk and a gallon of gas. We'll be living beneath our means, which is the only true safeguard!

Katy McKenna www.fallible.com

 

It certainly rings true to me. I'm fortunate to have no outstanding debt except for a mortgage but stretching a salary that increases at 3% a year to cover the recent inflation has got me cutting back on unnecesary spending. Vacation this summer will be spent at home, doing projects. I'm doing my best to stretch the current wardrobe, limit dining out to special occassions, and use coupons and send in rebates. I share CDs and DVDs with friends, get books from the library, and recycle/reuse as much as possible. I have not cut into my saving plan. What looms largest and darkest to me is next winter's heating bills. It will cost me $2500+ to keep the temps at 60 degrees - what will it cost to get comfortable at 68?

And by the way, how is everyone enjoying their TAX REBATE/ECONOMY STIMULUS check? I didn't get one.

 

Wow, that is a hefty heating bill. Now that I am reducing my electric bills with the solar panels, my next focus will be how I can reduce my gas and water bills.

 

@Anonymous - It's awesome that you don't have any debt. However, like Boston Gal is doing, you may want to consider investing some money into dual-paned windows, weatherstripping, and even solar panels. Even if you have to take on debt to do so, it will probably be worth it if you plan to stay in your house long-term. Plus, paying down solar panels or windows is a lot better long-term solution than paying so much every year to heat your house. At least with the solar panel/windowpane payments, there is an end to the payments!

 

I don't know for sure if I would say that I am strapped for cash. I am because I have two house payments. My parents decided to live with me and my son - and in a 2 br house (the old one) was not big enough for the 4 of us. I moved quickly and got into a nice new place - and have the 4 of us living in the new 4 br place. I have had the old house on the market for 8 months - and few hits, but the "downturn" hit right as I moved. I can afford the 2 mortgages, but really don't want to. I have had to limit some expenses but really, I live 5 miles from work, and I eat out a few times a week. So I survive by only getting gas about once every 3 weeks and limiting spending on frivolous stuff (DVDs, CDs, etc.) Getting $7 a day from my parents helps as well :) Paybacks are fun .. they made me pay them when I lived with them for a month after college before my job started .. it was just their turn :)


At the end of the day however, you will only notice the home devaluation process if/when you buy or sell a home. The food/gas prices are more immediate.


As for the refund check - I got my $0 refund check. I make no where near the amount of the limit - and as a head of household and one child - I was looking at a nice check. However, Capital gain on mutual funds was a huge amount in my income this year. That pushed me way over the limit for the refund and well lets say that being "single" even though I am head of household .. sucks.

 

Doing all I can to tighten the belt around here. Oil is our big worry. We use two woodstoves and will invest in a pellet stove this summer. I nip and tuck - just refinanced to a lower rate on the mortgage without pulling out any equity, dry clothes on the line, pack lunches and brew coffee at home. Our family vacations are camping trips.

The credit card balance stinks and I'm determined to get it down to zero. Eventually.

Daycare expenses, gas, and food kill the budget.

 

I cannot say that I'm feeling a pinch - then again, it's all about perspective.

I started working full time in August, after many years of being a student. In the beginning, I was throwing a huge amount of money at my credit card debt, but now that those are paid off, I'm working on building my savings. I don't own a car, but am saving to get one. I live within walking distance of work, so owning one is not necessary. While I wish I had more money to throw around, truthfully, I'm doing fine. Ive lived like a college student before, and I can keep on doing it.