Lessons of the Great Recession
I can finally share the good news I alluded to a week ago!
Dale was re-hired by the company that led us to move to our Little House!
He has yet to get his old job or pay, but he is back in now and it’s a first step. This is by far one of the best companies in this region. We’re just thankful he’s been rehired.
And it comes at a time when we were almost to the end of our collective ropes, mentally, physically and financially.
He had, up until today, been working 14 hours per day, split between two jobs at minimum and near minimum wage. (Too bad a book has already been written on trying to live on minimum wage, as now we know that it is impossible). We were set at the end of the month to lose our COBRA health coverage, which we somehow managed to keep for 18 months of his lay off.
The worst of it was that we weren’t sure how much longer we could keep holding on here and moving from our dream was the last thing we wanted.
When we moved to The Little House, we already knew we were in the middle of a big change in our lives. We couldn’t have also known that we were not only in the middle of a big physical change in our surroundings, but that our whole way of thinking about who we are and what defined us would also change.
As you already know, my mother had just passed away. Our dreams of building a larger house were also downsized even before the Great Recession hit.
As Dale and I pondered this past weekend how we would manage our money after we get caught up from months of literally teetering on the edge of bankruptcy (which is a very scary ledge), our financial plans were markedly different than they might have been five years ago. Instead of going out and looking at a newer vehicle, or one of those ATVs I wrote about on Monday and working a payment into the budget, we now will be a lot more frugal.
Part of truly Living Large is Living with Less.
Our generation was raised in an era that let us to believe the good times would last forever, and for us, the financial good times did last for 22 years of our married lives.
While we saved some and were more responsible with our credit than many of our contemporaries, we didn’t do all we could to avoid the situation we found ourselves in 18 months ago when Dale was laid off. Like most Americans, we were hooked on consumerism and relied too heavily on credit.
Our new mantra is, “If we can’t afford to pay cash, we can’t have it.”
Sure, we’re looking forward to doing a couple of things at the end of the month such as going “home” for a visit to KC, something we haven’t been able to afford to do in over a year (I also have writing research I need to complete there).
While in the city, I will definitely pick up a new pair of tennis shoes. Not only did this job come along just in time to save our finances and health insurance, it came along just before I literally lost my sole!
When we get back, we’ll splurge on a couple of new boat batteries and the $10.50 each for our fishing licenses so we can enjoy the beauty of the water that surrounds our gorgeous property. It’s going to be a great summer.
Beyond that, we will be working to rebuild our savings and pay off remaining debt, including the Little House and the truck.
We know now the good times don’t last forever and we won’t be caught in this situation next time.
What lessons have you learned from the Great Recession?
Hello! and PAX to you. I noticed from the pubilshed pics in the DEC09/JAN10 edition of M.E.N. that you might be Catholic. If not then Peace Be With you anyway! We are.
I'm really excited about coming across your article. We live in the NW corner of Arkansas. Siloam Springs area in the country on 5 acres that we are stuggling to hold on to. After the fresh air of reading your article I'm ready to let it go and get back to the basics.
I'll get an email address and send you more later. Keep up the good work. You are an inspiration I would bet to a lot of good folks.
God Bless YOU!
Ray
Welcome to our little Living Large community here, Ray! You must be referring to the statues in the photos on MEN. Actually, those belonged to my mother, she loved religious figurines and statues. My father was Catholic, but we were raised Lutheran. No matter, same God.
Glad to hear from a fellow Arkansan, there are a few that visit here! God Bless you as well! Look forward to hearing more from you here.
congrats!!
Thanks, Emily!
Kerri:
First, congrats to both you and Dale!
I love how you said "Part of truly Living Large is Living with Less." That is so right!
We also don't rely on credit and believe that if we can't afford it, we can't have it. My thought is this, "If we can't pay for it today, what makes us think we can pay for it tomorrow." With that said, we save for things instead of charge too.
Thank you, Sharon. That's a good mantra. If you don't have the cash today, whatever you want will still be there tomorrow!
What good news and just in time. So happy for you.
Thank you, Shebear!
Congrats to you both! I know that it is a relief, was hoping that is what the good possible news was!
Wish I had been able to make this financial connection years ago think where I would be now? But better late than never right? Big Yeah again for you and Dale. cindyt
I have always lived using the Rob Peter to Pay Paul mode while raising my three children by myself…never seemed enough $$$ to go around for all the wants but thankfully, we had all we needed. Now that I am heading into retirement years with absolutely no savings to speak of, I have really had to do a financial shake up, which was the reason for my downsizing and really taking a hard look at everything trying to decide was this a want or a need? I have really been able to make some serious changes while I still have an income and am making some good savings/investment strides that I hope will get me closer to where I want to be in the next 6 years or so. Paying of the house is the biggest because w/o that mortgage rock around my neck I pretty sure I'll be able to swim instead of sinking! Looking forward to my new life with less stuff and not being owned by all of the credit cards that are now nearly all paid off. Just one more to go!
Thanks, Cindyt!
I think it's great you realized where you were before you hit retirement, so many people do not. Our retirement accounts, small as they are, were the only things we didn't touch these past two years, mainly because of the huge penalties. We had really only started them and so they don't contain much, but it's a start I hope to continue to build upon now (of course, we haven't contributed to them in 3 years). But you're right, a mortgage is like a rock around the neck and I hope to get rid of that.
Congrats to Dale!
After my spouse was laid off in 2006, it made me realize how fragile our lives really are. Had I not had a solid job as a nurse, we would have fallen behind for sure. Thank goodness we had in the last couple of years made a committment to pay all our credit cards off and in 2007,we completely paid everything off except our house. It made me reflect on what is really important. My husband, now employed since Feb 2009 makes a third of what he made from is prior job. While we were never frivilous with our money, we acquired most of our debt from necessity things, such as big car repair bills, tires, home repairs, etc, unfortunately. But from these hard times, we have learned how to save better and manage our money efficiently. It cetainly made me more conscious of how our economy is doing.
I don't think we are out of the woods yet with what continues to happen globally. And I think those of us who have the forethought to plan ahead will be much better positioned for the next jog downward.
Thanks, Sandy! I want to be you when I grow up!
Seriously, I aspire to be the frugal, queen of savings prepared for anything. Thanks for the note of inspiration.
Congratulations on the job. I've been fortunate enough to have lost everything in the past, so I know the stress that kind of uncertainty has.
Thank you, James. Those who've been there can truly appreciate.
Congratulations you guys! We know the feeling of loss since my husband got laid off 7 years ago from a very well paying job from which we spent every cent. The only thing that saved us was that the housing market was still good. Although we couldn't afford to stay in our house we were able to make a profit on it which allowed us to cope for a little while. Nowadays people can't even fall back on that. We are grateful. Still reading "The Green Year", Kerrie and really learning some great new things!
Thank you, Becky. I'm glad you're enjoying The Green Year!
Congratulations on the great news–and even more that you are learning from your experience. For the garden, I highly recommend http://www.squarefootgardening.com as a super method that is incredibly workable and far less work than about any other I have seen.
You might check Craig's List and any freebie sites such as Freecycle in KC as you prepare for your trip–you might find canning supplies someone else is getting rid of either free or cheap!
I live in Ukraine these days, where incomes are a fraction of those in the U.S., while many costs are as high (but not all, thank God!). By seeing how we do things here, many people could learn a huge amount on how to live more sanely and more economically.
I was surprised at another commenter's statement that someone couldn't attend a wedding because they "didn't ahve anything new to wear." If the wedding is of family or friends, woudn't they rather have the presence of the person even (gasp) with an outfit already in the closet?
All the best,
David
Thanks for the link, David. I agree that many people in other countries do live more of a "sane" lifestyle, as life was meant to be. I think we learn at our own pace though and our immediate environment has a lot to do with it. I know people who think "getting back to basics" means cutting out the $4 lattes every morning. In the type of natural environment we're in, where wages are low and people are forced to live a more frugal lifestyle, the learning curve is quite a bit faster.
Congrats on the re-hire. Honestly my husband has been blessed during this recession. He is in telecommunications and research shows that cell phones are one of the last things that people will give up. I do know that it has forced me to re-evaluate what truly is important and has also made me look harder at what I've always longed for and how to go about getting there. I know that we live on more than we need. We do not use credit like many other Americans but we do have credit on a house and a car. That's about it but we dislike even that. The recession has caused us to look at our married lives thus far (7 years) and re-evaluate. We've made several "rash" decisions and would like to not do so. Unfortunately sometimes it takes time to recover from the "rash". Example being: we were transferred from TN to WA over 2 years ago. The housing crash hadn't happened yet but was close. We bought a house (it wasn't at a horribly inflated rate) thinking that we could update it and turn it over. Everything was original 1950's. It's in the city on .22 acres. Now, Jeff is on his way to TN as I write this for a possible relocation back to TN or Missouri. What do we do with this home? Fortunately his company has some great incentives for selling a home but irregardless the "rash" decision has put us futher away from what our dreams and goals are. No more do we want to live like this. We have a 4 and 5 year old and while I garden, make our own soap, sew, knit, quilt, spin and crochet, I want them to learn more survival skills. Frugality. My quilting has often been expensive. I generally don't buy expensive (fabrics and yarn) but am aware that I could do it more in "survival" mode. Purchase thrifted linens for quilts, thrifted sweaters for crochet and knitting, spin more of the wool I have (used to raise sheep and angora rabbits) for yarn.
I suppose I have gotten long winded. This is just something that has been at the forefront of my mind.
Not long winded at all, Tami. I love to read about this community's skills and thoughts on how to Live Larger! I think we've all made those decisions that seems "rash" in hindsight, but like I've often wrote, everything comes into our lives for a reason. Positive thoughts to you about those future decisions.
Hi Kerri, this is great news indeed and I am very happy for you and Dave.
Part of the reason that good, normal people like yourselves have been so badly hit by this crisis has been a combination of the credit culture in the US and a lack of understanding about how our current financial and monetary system really works. I would like to pass on to you a "crash course" of a free series of videos on this subject. When I saw it years ago it utterly changed my understanding of the world. Partly due to this course, we made a series of changes that have helped to safeguard our financial future. We also took the plunge for a more simple life in the countryside (much like yours), here in Greece. We didn't downsize because our apartment in Madrid was 55m2 anyway, but we downsized our living expenses!
Here is the URL of the course: http://www.chrismartenson.com/crashcourse
Re: US credit culture can you believe that I've never had a credit card? The banks in Europe just would not issue us one because we have never had a steady job but were freelancers! I've never bought anything on credit either! Sure there were times when we could have done with a little extra to help tide us over rough spots but generally I have to say that I have not needed credit, even when surrounded by the temptations of the city.
Finally I would like to say that I do not believe for one bit that this financial crisis is over. I believe that there will be a second wave of bank failures and a series of sovereign debt defaults (much like Greece). The math is simple, you simply cannot print your way out of debt without collapsing the entire edifice of the financial system.
I am sorry to be all doom and gloom in the midst of glorious news. Just that I enrages me to know that good people like yourselves (and many of my Greek neighbors!) have been utterly shafted by our monetary system. Now that things are looking up, I encourage you to inform yourselves, so as to better prepare and protect yourselves in the future. The first steps of paying off debt and rebuilding savings is already in the right direction.
Phew! Long message… all my best and once again congratulations to the both of you.
Thanks for the link, Vida. I will check that out! It's not doom and gloom, but reality. I don't believe the crisis is over, the recent news of the European debt problem, as well as the Gulf oil spill, does not bode well. However, I think there are significant signs of recovery here. I would like to think the *worst* is behind us, anyway. I wish we had never had a credit card, but live and learn.
Kerri, once again I hate to be solely pessimistic but the "recovery" has been due to trillions of dollars injected into the system and the stock market run has been a only a generational bear market rally. Just think that the US will have total (public, household and institutional) debt refinancing needs of 5 trillion this year alone! If there is further sovereign debt panic (UK is the next possibility) and the US cannot refinance via treasury bond issuance, rates will rise uncontrollably, bursting the bond bubble and causing a new wave of financial institution bankruptcies. This is a very real possibility this year and will screech any recovery to a halt. Which is why I say, protect yourselves. This is JMHO, if I am wrong (I sincerely hope so) then you will be better positioned then ever!
So glad to hear this news!!!
What lessons? Well, as an innkeeper to be willing to lower prices if a guest's voice, over the phone, sounds like someone worth knowing. I have always been frugal, so did not change all that much. Yes, I did realize how having a credit card can lead to debt and follow your mantra, PAY CASH, PAY CASH, PAY CASH!
I'll keep that mantra running through my head, Alexandra!
Yay! The good news is GOOD news! I was hoping the good news was an employment change for him…
We paid off our house recently and are amazed at how little we can live on without any debt payments. It's a great feeling to know that, should the worst happen, it will be possible for us to get along on the minimum. At the same time, I'm hoping to plant more gardens and begin learning to can (this summer: tomatoes) so that, should things deteriorate further, we'll be able to live on even less. Many of my husband's clients (over 65) have lived here their entire lives on almost nothing; they save their seeds and plant huge gardens each year, and make what little they have last and last. I want to learn to live more like that!
Kim
Thank you, Kim (and thanks for those leads. Dale is talking to one of them now about a weekend job). Anyway, that's terrific that you paid off your house! Most of our neighbors also have homes that are paid off (now we know why) and they are also amazed at what it *really* takes to live without all of the payments. Like you, we're already harvesting veggies and saving on groceries. I also hope to learn to can and freeze some this summer so we can continue to save year around!
Oh Kerri– SO happy for you and Dale! What a tremendous relief you must feel! Also– thrilled that you will making a trip to K.C. soon! Sushi and Starbucks are calling! Congratulations!
The biggest impact of the recession on us is the uncertainty of David's job. Though he has dodged the layoff bullet for eight years (eight major layoffs at his company in as many years) we still feel nervous about making any big financial commitments. This means that the house on our land we planned on building– hasn't happened and we aren't really sure when or if it will.
I am of course, disappointed about that, but also realize that we are lucky he is still employed and we certainly are better off than many who are struggling to survive this terrible economy. I do hope that you are right about Dale's company being a positive sign for the whole country. So many are suffering and have lost everything.
I guess the other impact on our family, of this recession, is the way that we have to watch our daughters struggle to pay their bills and have a quality of life at the same time. We help out as much as we can, but I wish we could do more. I'm proud of the way that they each are responsible with money and have learned to be frugal and thrifty– but hate it when they tell me they don't have anything to wear to a wedding because can't afford a new outfit, or have to stay home on the weekend instead of going out with friends, because they can't afford an evening out. I wonder if they will ever have the kind of comfortable middle class lifestyle that we have enjoyed for most of our marriage, and that they grew up with. Parents always want to see their kids do better, go farther, achieve more than they themselves. I wonder if this generation of parents will ever be able to see their kids secure, own their own home, live the American dream. I hope so.
Thank you, Kathleen. And yes, definitely sushi and Starbucks in my near future!
I'll be in touch.
Sometimes you just have to do what you can to plan and then see where the chips fall. I don't think you can allow fear to keep you from your dreams. There were times when I thought if we had the move to do over again, we wouldn't have done it at that time. But in the past few months, I started not only trying to find more solutions, but looking at the lessons learned. It wasn't easy for us, but something I'm convinced we needed to advance our lives. I also kept in mind something I asked my mother just before she passed away. She had to sell her dream home shortly after my father passed away. I asked her if she would rather have had it for the time she did and lost it, or not have had it at all, she didn't hesitate in saying she would rather have had it and lost it. Truly, that is what Living Large is all about, taking that chance, even if it doesn't work out as you hope or plan. As for your daughters, you should be proud. They are independent women who are living in one of the most expensive areas of the country. We all go through that single, frugal, eating Ramen noodles 3 nights a week phase. I remember those days well and some of the best times I spent were nights the other single women in my apartment complex had "Knots Landing" parties. We would bring a (cheap) dish and feast while watching our favorite night soap! Your daughters will make it and they'll be better for it.
Of course, I know you're right that we all have to go through some struggles before reaching goals– financial and otherwise. And– you're also right that they will make it, and will be stronger for having had to work hard for what they achieve. It's hard to watch your kids scraping by and stressed about money though. I am glad that neither is hooked on credit cards or overspending. They are both good savers (get that from their very thrifty dad!) And– I also agree that it's important to be willing to take risks in order to achieve dreams. We haven't given up on building our house, but are hoping the next six months or so bring more stability and security in David's job. I do believe that we'll get our house, but it might take a little longer than we thought. Congratulations again on the wonderful news!
Hey Kerri,
This is fantastic news! I'm so happy for you and Dale.
I can relate to what you wrote about frugality, cash and downsizing too. We've also been through some tough stretches during this recession, and the only way we got through it is that we made major changes to how we handle our money right before the recession hit, based on the book All Your Worth. It was really lucky timing, because I have no idea how we would have made it through the recession (not to mention paid for all the medical care our dogs needed) with our old financial habits.
Here's to hoping the lessons many of us have learned during this recession will make our financial lives even better going forward.
I know you've had your moments too, Allie, especially with all of the vet bills you've had in the past couple of years.
I think things come into our lives for a reason and your change in the way you handle money happened just in time for you to be able to handle those bills.
I'm with you, let's hang on to those lessons. Life is a wild ride!
Hi Kerri, I am happy things are turning around for you and Dale. I know how hard life can be. Dale going back to his old job means other people in this area are happy to be back to work. Everyone's lives have changed the past couple of years.
Thank you, Mary. I think our region has survived the worst. Dale's company is hiring back slowly, which is opening up other jobs at the other companies when people are called back. I feel truly blessed that we survived this still with our home and our credit reasonably in tact. Some people were not so fortunate. Besides being more frugal, we will also be more generous with those who have fallen on hard times.
I am so happy to hear about Dales new/old job. I know that is a big relief to you both. In our 40 yrs together we have been through some scary money problems with the added bonus of kids to support. All I can say was God was looking out for us, even when we didn't know it. The one thing I am really thankful for is that we are retired Navy and do have our medical because of that. Two of my sons do not have medical and that really worries me.
PS
Be sure and model them for us. By the way how is your toe?
I so glad to hear that Mama's going to her herself a new pair of soles
Not having medical insurance is truly scary, especially considering just 3 days in the hospital can run up a bill into the $20,000-$30,000 range. Thanks for asking about the toe, it is fine.
The reason I have to buy my shoes in the city is that I need quality walkers as I break down the support so quickly. That's a challenge when I wear a size 4 in children's!
Boy you have tiny feet.…size 9 gun boats here. :O