topic Re: What steps are you taking to weather the economic crisis? in Community Polls

What are you doing to weather the economic crisis? See the results of this poll.

Barry — Mon, 03 Nov 2008 15:43:05 GMT

Please vote and share with the FICO Forums community some of the personal financial changes you’re planning on making to adapt to these changing economic times.

Thanks!

Poll results:
* Limiting my spending (75%)
* Redirecting my investments (13%)
* Making no changes (13%)
* Refinancing my mortgage (0%)
* Changing my retirement plans (0%)

Total Votes: 32

Message Edited by Barry on 11-03-2008 07:43 AM

Re: What steps are you taking to weather the economic crisis?

llecs — Mon, 13 Oct 2008 16:40:04 GMT

DW and I re-evaluated our budget. We needed to lose weight and saved money by not going out to eat so much. We cut back on entertainment (other than here!). We used to go away nearly every weekend and cut that back as well. Basically we looked at what we could cut now and diverted those savings into our investments and other cash savings. And we increased our 401(k) as now is a great time to buy.

We also made a decision to increase our income. We didn't want to put all of our eggs (a job) in one basket. All it takes is a crack in that egg (job loss, outsourcing, illness, etc) to lead to financial ruin.

All the while we had prepared for the "what if" scenario. We never wanted to be placed in a situation where we were dependent upon others. We had made changes over the past several years to prepare what we are in now.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Tue, 14 Oct 2008 04:57:38 GMT

1. I weatherized our entire apartment. Our heating bills were getting higher each month so I caulked some cracks, winterized the windows, and weatherstripped the doors. Then I put an extra fleece blanket under the fitted sheet on the beds, got a flannel top sheet and then the comforter. Thermal underwear this year! Anything not to raise the heat.

2. I also realized that when I cooked I tended to fill the dinner plate and we always ended up with uneaten food that got thrown out, or stuck in the fridge then thrown out. So I got rid of the dinner plates and substituted them with salad plates. Got rid of our huge pots and frying pans and kept the smaller ones. Now I don't over cook, we don't over eat and I don't overspend at the supermarket. I don't know if it's psychological but my grocery bill went down and my fiance lost about 10lbs.

3. I went over my entire checking account statement. I got rid of things that were auto billed like online magazine subscriptions. I found a phone bill error of about $500 for a number I ported but was still being billed for the past 9 months. I think I wiped out about $1000 of unecessary stuff. I did the same with our credit cards and put some of them away.

4. I set up two savings accounts and one 12 month CD. One of the savings accounts is an auto deposit from our checking and we forwent the ATM card so we won't be tempted to make a withdrawl.

5. We started the toy storage thing with our kids. We take half the toys and put them in storage. After 6 months we'll rotate them. The TV is now on a timer where they only watch it for 4 hours max per day. After that the kids have to find something else to do. My 11 yr old daughter suddenly found an interest in books. And our two year old is finding an interest in pretend play. Im guessing we are saving some energy with the TV and computer not running 24 hours a day.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Tue, 14 Oct 2008 13:30:41 GMT

1. Continuing to invest in 401K despite the doomsday predictions. I remember reading in high school that the people who came out on top after the Great Depression were the people who just ignored the chaos and continued their stable investing into an unstable market. THe pay-off was 20 years down the road, which is our timetable anyway.

2. Living w/in 10 mi radius of our offices.. prior home was 30-40 miles each way for work, for both of us. We're now 8.5 and 4.8 miles away, respectively. Filling up each car every 2.5 weeks, instead of every week.

3. Grilling out instead of eating out. Bought a charcoal grill for $170. It will pay for itself in the first three cookouts, since eating out for a family of 4 usually runs $70. And I hate cooking, so we ate out a lot. But DH LOVES to grill.. even in winter.. don't ask..

4. Consignment shops.. I hardly ever buy new. Ann Taylor, Banana Republic, Express -- my entire work wardrobe cost only $3-$8 each, from consignment & second-hand stores. I am a labelwh@re, but can't afford to be at full-price! Ditto for my kids -- Gap, Guess, Diesel, Limited Too, all from Once Upon A Child.

5. Getting rid of all subscriptions.. classmates.com, playhousedisney, etc.. who really needs those? The kids can play online without a subscription anyway. Saving about $40/mo there.

The things we WON'T cut back on:

Renter's insurance, credit card insurance, auto payment insurance... anything that could come back and help us out in an emergency, we are NOT waiving.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 15:28:27 GMT

No changes. I try to only buy what I need. Even before all the bad news, I could drive myself and DW nuts thinking and overthinking a small purchase.

Case in point. Bought a wheelbarrow last year that I needed for work in the yard. One came with the house I bought last September, but the handles were housing a family of termites and the metal was rustier than a PG&E gas turbine without chromium six. The rust was liveable, but I rationalized I could fashion a set of handles from scrap 2x4s, which also came with the house. But, once I took it apart, I woulda had to spring for carriage bolts that woulda been close to $10 for hardware alone. Tire was flat and mighta needed an inner tube, so I spurged and bought a brand new wheelbarrow. For around $35 at HomeDepot.

I've tried to do yard sales, but the season is pretty well at it's end. Besides, I never seem to find what I need. Same thing at consignment shops, both for me and the kids. DW won't shop at one. Her Majesty is above that.

Only clothes purchase I might need for the foreseeable future is a belt, socks and, only if the work situation were to warrant it, a suit or two. Wife doesn't live to shop, but she doesn't seem to hunt for bargains all that much. Although she's a full figured gal who can't buy just anything anywhere. Fashion Bug Plus, Avenue, Lane Bryant, et al. are her usual source. Kids clothes, we take full advantage of sales and deals at Children's Place.

I likely won't buy or sell a car, unless the motor seizes on my Saturn, in the next 1-2 years. Once the Chevy Volt, CityZENN, Chrysler EV, Ford Escape hybrid plugin, and a few others hit the market, then I'll start considering a trade.

I won't buy another house, unless my bookie calls because PigVomit wins the 4th race today. If a windfall does come my way, now is the time to invest in an investment property, rental or flip, and/or the stock market.

Coworker of mine is the voice of despair, gloom and doom. He's also a Ron Paul supporter, still, and I think the two conditions might be related. He was querying me about the bailout package a week or so ago, and I finally told him there ain't a lot I can do about it, and fretting over it making myself and others miserable ain't gonna solve nuttin'. He asked whether he made me miserable, and I honestly said no that I found him interesting. But I added that I knew others in the office weren't very thrilled with his constant despair and that he may be on thin ice with management. Also not made up. He has perhaps taken it to heart, based on his behavior since. So, perhaps, for the crisis, I'm counseling others about their employment situation.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 15:30:47 GMT

I'm doing the same thing I've always done...whether a "financial crisi" or not...in terms of cash flow. Watch the spending, know where the money goes, eliminate the things that are not needed or not "value-added". By doing this, we have a surplus of cash in the bank, and our budget and spending habits are not out of control.

Credit cards are paid in full at the end of every month (have been for 20 years!). No car payments, no revolving store account payments...only a home mortgage (about 55% LTV) and rental property debt (see below). When we need to buy something, we research, budget the purchase, and then try to buy it for less than full price (i.e., on sale!!).

I'm still buying stocks through my 401-k (although I rebalanced some of my assets prior to the big drop). I'm also buying houses and holding them (everything's ON SALE!!!), and they cash-flow positively as well (rent is about 2:1 over P&I payments, which leaves plenty of room for management, maintenance, and vacancy, plus "extra cash").

Here's the message: Manage your cash flow during good and bad times, don't live on credit (i.e., spending more than you make), and don't go into "bad debt" to provide lifestyle (my rental houses are "good debt" - they make more money than I spend on them).

BTW - my credit score is 782. I keep regular track of it through this great service you guys provide!

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 17:46:20 GMT

1. Got a second full time job. This provides many benefits -

a. more pay;

b. no time to spend money

c. if I lose one job I have the other to fall back on

d. a second matching contribution to max out from my employer

e. an increased social network

f. an increased chance of oppurtunities

2. DOUBLED my retirement investments into a blend of 'high risk' funds. 30% small cap, 30% large cap, and 40% international. I went from 6% of my yearly salary to 12% and plan to raise it to 15% come mid Janurary. I seem to be on of the few that i looking at the markets right now thinkg 'cool! 30% off sale!' (Note: I've got 30-45 years to let the markets rebound - I don't think this is a good idea for anyone that is within 10 yrs of retirement)

3. Started Coupon Shopping and signing up for Free Samples

4. Walk to work and or the store more often

5. Hit the grocery stores for free samples (hello free meal!)

5. NETFLIXS! If I go to the store and rent movies it will cost me 15.00 for 3; instead I pay Netflix 15 bucks a month and watch an average of 24 movies in a month. Which also means I don't feel the need for Cable/Dish TV (subtrack 60-100 dollars from your monthly budget).

6. Invested in my Financle Education and subscribed to the Wall Street Journal

Instead of seeing an econmic crisis I feel like I'm looking at an econmic oppurtunity for my future.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 18:01:53 GMT

GOOD POST.. enjoyed reading it

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 19:29:29 GMT

I adjusted my 401K allocations about 9 months ago (only slightly more conservative) and don't intend to overreact to the flurry of activity in the past 2 months. I have 15 years before it matters so I just need to hang in there.

My expenses are already under control so my spending habits remain the same. I watch all of the recent activity with a somewhat detached mindest.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 20:46:58 GMT

Doing my best to pay down my credit cards, personal and student loan.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Wed, 15 Oct 2008 21:28:47 GMT

Actually I've been doing a budget sheet "before" things got bad. Now I am re-evaluating my budget and this is what I came up with.

1. No more eating out on weekends. Do Exercise instead

2. Don't charge anything if you "can't pay it off "

3. Continue paying down the larger loans and student loans as best I can

4. Wrote to some of my creditors to reduce the credit limits and refused higher credit limits when they were offered to me.

5. Cut my cable bill in half by closing unnecessary channels

It's hard to do this, cutting back so much, but really at the end of the month I feel better seeing that my statements with this on it "0".

And I am saving again and re-building my IRA.

Also as a senior, I am looking for work again in my Nursing field or whatever I can find.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Thu, 16 Oct 2008 12:54:31 GMT

I question Item 4...

4. Wrote to some of my creditors to reduce the credit limits and refused higher credit limits when they were offered to me.

My understanding is that this will reduce your credit score not improve it. If your balance on a card is higher than 30% of the limit, your score is hurt. Therefore a higher limit that is not used is good for improving your score. I would also accept the higher credit limit when offered; it helps improve score. Better to have a few cards (less than 6) with higher limits than many with lower limits.

Re: What steps are you taking to weather the economic crisis?

haulingthescoreup — Thu, 16 Oct 2008 14:42:47 GMT

Camishela wrote:

I question Item 4...
4. Wrote to some of my creditors to reduce the credit limits and refused higher credit limits when they were offered to me.
My understanding is that this will reduce your credit score not improve it. If your balance on a card is higher than 30% of the limit, your score is hurt. Therefore a higher limit that is not used is good for improving your score. I would also accept the higher credit limit when offered; it helps improve score. Better to have a few cards (less than 6) with higher limits than many with lower limits.

Very true. I sure wouldn't do it, never knowing when creditors will decide to lower you again on their end.

But some people do get nervous with higher limits, fearing they'll be tempted into running up their cards. (Not saying that's PP's situation.) It all comes down to how you regard your cards, I suppose. I just think of them as really slow debit cards. If I don't have the money in the bank, I don't use them. They're strictly for convenience and rewards, not delaying reality.

I guess in terms of weathering, we're paying better attention to the leaks in our spending, hunting them down and plugging them. I'm trying to ignore someone who's offering me a job change with way better conditions but much less security, sigh. And we're lucky to live in an area with low, stable housing costs.

We're nervously grateful, I suppose, or possibly we're gratefully nervous.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Thu, 16 Oct 2008 14:53:07 GMT

Hi:

"4. Wrote to some of my creditors to reduce the credit limits and refused higher credit limits when they were offered to me."

Question:

The letters I sent out to reduce my credit limits were on my loans with Bank of America. Yesterday I received a letter saying they were already had done this during the first black Monday's crash. The others, such as credit cards, well the limits on them were set when I open them, and they're increasing the line of credit themselves and I do accept it within reason. It's the Bank loans I don't want higher limits with due to the high interest rate.

Re: What steps are you taking to weather the economic crisis?

Anonymous — Fri, 17 Oct 2008 10:29:50 GMT

Paying down remaining debts
Pay off credit cards every month
Delaying purchases of major items such as furniture
Delaying remodeling projects
Tweaking the budget to cover increases in the price for- food, gas, heating,
going green with electric, replaced incandescent light bulbs to florescent
eating out once every two weeks instead of weekly
no movie purchases
fewer music purchases
bag lunches to work
I have not touched the 401k, waiting for upturn. All regular contributions to the 401 K is allocated to stocks, (might as well buy them cheap).

Re: What steps are you taking to weather the economic crisis?

Anonymous — Sat, 18 Oct 2008 10:01:30 GMT

I had made the choice to start working on becoming debt free a few years back. I now, in my

40's have the maturity to make it happen. Of course I am in the process of buying a home, so when I say debt free, I mean frivilous debt. Constant checking and renotiating my terms and interest. I have around 9k in credit card debt with an effective interest of 1.98%, unlimited payback time. The CC companies hate me, but who cares. I pay at least triple the amount due religously. I keep my shredder in the living room so before I get comfortable and tempted to look at offers, I drop them in the feeder.

I buy only what is needed, look for ways to co-op with friends, ask for a deal or discount on EVERYTHING I purchase. I also follow the advice of Warren Buffet (of course I use pennies where he uses dollars), subscribing to Drips, buying stocks of companies I know, understand and are a need or people still spend disposable income on.

Re: What steps are you taking to weather the economic crisis?

GFer — Mon, 20 Oct 2008 04:08:06 GMT

My goal is to buy a house next year, so I:

Moved in with my daughter to save for the down payment. Not only do I save in rent and utilities, but we never have to pay for sitters because we have different schedules.
Even though I PIF my cc's every month, I took all but one out of my wallet and I will rotate them. I find that carrying all of them makes it easier to spend more and harder to keep track of.
Starting looking up all the frugal sites and tips...as another form of entertainment (besides pulling fico scores continously...LOL
Started drinking water and lemon water vs sodas and other convenience drinks
Started taking lunch to work
Made the decision to shop consignment stores vs others where possible
Was going to get a 2nd job, but decided to work OT at current job because it pays more and I spend less gas!
Instead of vacation we made the decision to stay home and everyday while on vacation to do something 'as a family'. Everyone gets to pick something they want to do (within reason).
Learning the art of coupons and deals!

Re: What steps are you taking to weather the economic crisis?

Anonymous — Tue, 21 Oct 2008 00:52:17 GMT

i'm eating out much less. i'm packing my lunch and bringing it with me to work.
i also stopped buying coffee at startbucks or dunkin' donuts. i make my own coffee at home and bring it with me in a travel mug.
i am evaluating everything i buy to make sure it is something i need and not want.
i'm creating a new budget and am more commited to stick to it!
i'm reading "the money book for the young, fabulous, and broke" by suze orman. it's really helping me too!!...so much so, that i'm actually posting on myfico.com. i must be turning a corner.

Re: What steps are you taking to weather the economic crisis?

haulingthescoreup — Tue, 21 Oct 2008 01:22:09 GMT

joulze wrote:

i'm eating out much less. i'm packing my lunch and bringing it with me to work.
i also stopped buying coffee at startbucks or dunkin' donuts. i make my own coffee at home and bring it with me in a travel mug.
i am evaluating everything i buy to make sure it is something i need and not want.
i'm creating a new budget and am more commited to stick to it!
i'm reading "the money book for the young, fabulous, and broke" by suze orman. it's really helping me too!!...so much so, that i'm actually posting on myfico.com. i must be turning a corner.

Welcome to the forums! That's a good book for young people trying to figure all this stuff out from scratch. I gave it to my kids, and they acted offended, but I noticed that after several weeks, they were quoting from it.

Re: What steps are you taking to weather the economic crisis? See the results of this poll!

Anonymous — Wed, 29 Oct 2008 01:02:05 GMT

There are a lot of things I do, not only in an economic crisis, but most of these are habits.

Think about if I can run certain errands on the way home from work rather than making special trips.

Don't drive aggressively - saves not only on gas, but also nerves and potentially an accident

Pay online to save money for the stamps

Make home improvements that pay off long-term (95% efficiency furnace, energy efficient appliances)

Don't run equipment, lights, etc when they are not in use.

When I see a good bargain for things I use on a regular basis, I stock up.

Most of all, make sure that I do my best at work every day - with a smile on my face. This helps ensure that I will have a better chance of keeping my job when things get rough.

These are just a few...