Honestly - not a lot. I guess maybe I go out (to a bar or restaurant) for drinks less often, but gather with friends at my house or theirs more often so it is a wash. I cut back on my ornamental gardening "wish list" a bit this year, but it is more because I am running out of planting room rather than the cost.... As far as grocery shopping - I buy whatever we need and shop the sales for what we want, but I have always done that. I am going to buy more local produce this year, but that is not just because of the economy, it is jsut a smart thing to do.

We still haven't decided on a vacation for this year, so I have no idea on those lines......

Alexa

We have, No going out to eat at our favorite restaurant. Gas in car has to be short trips or combined trips for more than one stop. Groceries have been affected also. Most beef is out now due to high price on it, chicken is getting higher in price also.

When school is out for the summer, it will be affecting us more since I will not getting a paycheck.I only get paid when school is in session for the year.

I feel fortunate my lifestyle hasn't really changed, but I've always been conservative

Ditto. So far so good.

What actually has made me even more conservative is having two kids in college. I definitely cook a lot, but always have. I get all movies and books from the library. Both DH & I are fortunate to live close to our jobs. No car payments on either of our cars, they're old but still running well (knock wood).

Now, IF I weren't worried about college expenses, I'd probably be out shopping for a good deal on a new car. (Mine is almost 12 years old, DH's is 10). But I'll wait till they graduate if possible.

I'm there too on the car issue, May. (Not about college expenses, just that the cars are aging. There's the roof to consider in a few years as well, which causes a bit of a shudder.) We're waiting to refinance our mortgage, and add a small new car buy into that, but will pause until we get that extra quarter point that makes a refi more attractive. It looks like a good time to start the paperwork, waiting to lock in the rate until that happens.

My wife's overtime has been cut out completely and that diminishes her salary by 20k-30k, so with that...ouch. But my business has been increasing to make up for so we are about even with the income. I am nervous about the car companies survival though. Living in the Detroit area we know how their survival or lack therof would have a huge economic issue, really catastrophic impact if one or both of GM/Chrysler fails.

Duane

Duane, It sounds like you'll be all right, which is good. Remember during the late 1980's-1990's, when tech companies were starting up? They were running those companies lean and mean, which is why they were so attractive to investors. I can't tell you how many mergers my dh went through with the businesses he worked for. I guess that lean/mean message hasn't knocked on any of the American car company heads, along with wrenching the cars America wants to buy, into the 21st century. Hopefully, they will wake up and figure it out. It seems pretty obvious to me!

Our bank stock 2000-2008 avg worth apprx $50/sh is now 34 cents/share -- to think I use to worry when it would drop to around $37/share. Thank goodness this wasn't a major investment, but it still stinks!!!

I hear ya, Brenda. I got caught on one of those fateful fall '08 Sunday nights holding Wachovia. (sigh) To make me feel better, I guess, my shares were converted to...yep, BOA. Oh, yippee!! Those shares & $5 will get me a cup of coffee... Maybe, I should call Chuck & tell him I want physical possession of my shares & wallpaper the bathroom with them?! Whatcha think? :)

I've got everything stabilized now so today's market thrashing didn't give me heartburn; but I'm concerned about the so-called "guaranteed" pensions we're due to start collecting in 4 years.

/tricia

So far, no direct hits, but we have conserved, just in case.

Dinner out on Saturday is now only about once a month, and midweek has stopped. We never said it out load, but I seem to plan dinner on the weekend.

The electric company has a newer plan that shuts down your A/C compressor between 3 and 5 pm to helpcut costs. Your fan will still come on to move air. This is the peak $ time. Since we usually cook and eat outdoors in the summer, this will work for me. I can always pick up a small window unit to run if the heat gets to me.

I am thinking twice about buying clothing, but that could also be due to a bit of weight gain....

My minivan is 8 + years old and still going nicely (knock on wood). I will keep her for a bit longer.

Pension and IRA hits are the worst. I hate to look.

Vacation? I am in some planning stages and will take one this year. I need it badly.

Grocery shopping has become a personal challenge to find the best deals. I was so happy to buy a jar of pasta sauce for .25 with a coupon and a sale.

We're still okay even though my hours at the hospital have been cut and the travel business is s..l..o..w.. But our savings account has been tapped into.

Our investments aren't worth much more than what we started with years ago. That bites.

It's gonna be a tough and very lean summer, with a new grandbaby on the way in May and a wedding in July. No vacations in the foreseeable future, other than a couple of trips to Chicago.

Looking for a new job....what a joke. There are some good jobs out there, but too many people competing for them!

Linda

My situation is strangely much better than a year ago, and so I have been spending a lot more and am still able to save quite a bit. I got hit in 2001 with a layoff and then did free-lance work up until last week when I got hired back full time from the company that laid me off. My boss assured me that she would never let this happen to me again, and having me back has helped the company, I believe. The business I'm in (high-end furniture) is very unpredictable, but lately we've had a lot of business from Europe and the Middle East. It seems that during recessions, people with huge amounts of money buy furniture instead of real estate, and so I often to better during a recession.

I've noticed that the grocery stores have been quite crowded lately, and so I think people may be cooking at home now more than usual, and the checker at the market agreed with me.

I'm hoping to have a trip to Denver this May so that I can see Lee plus some of my long lost relatives. I'm putting off going to Europe until the Euro gets a bit lower.

Lars

As someone who is counting on investments to supplement a meager pension and social security....yep, I feel it very strongly!
The earnings from funds which are down about 40% since maybe 5 years ago are scarey low!
I have stopped doing lots of things...quit the country club, stopped with the $30 a week salon stuff, delaying new furniture etc.
I guess it's those on a fixed incaom who are really feeling it.....and those who have lost a job.
Linda C

I would say we've definitely beefed up our cash savings efforts. We haven't had a secure financial safety nest stashed away for "just in case" and that makes us both nervous.

I don't carry any debt, but my DH has quite a bit of CC debt that we need to whittle down (sore issue between us).

So, I guess I'd like to ask a question from all of you:

If you had $1000 extra each month, would you use that money to go towards paying off CC debt, or would you put it towards savings?

Which is the smartest thing to do?

I would pay off the CC Debt as fast as possible then put those cards away and not use them. Then I would start building that emergency stash.

Alexa

Joe,

In normal times I'd quickly say, "Pay down the CC debt as quickly as you can", and not think twice about my response.

But, these are not normal times. Used to be financial advisers recommended a 3-6 month cash cushion. Most today recommend 9-12 months kept either in a MM account or laddered CDs with short maturities (nothing over 18 months).

So, I'd suggest you pay yourself first. When you've got a minimal cash reserve (3-4 months) start splitting between further savings & debt reduction. When you've got a 6-month cushion then finish paying off the CCs. In the long-term the economy will be fine...but this is truly a different kind of recession & I'm afraid the short-term is going to be ugly by year end & many people aren't going to have the cash to ride it through.

The only caveat I'd add is...if the CCs are over about 30-35% of their limits get them down under that number before you concentrate on savings. The reason is because lenders (especially CC companies) are raising interest rates (sometimes doubling) and/or cutting off entirely users with higher balances in relationship to available credit.

You're not alone...DH tells me money is flowing into the bank so fast & furious they can't push it out fast enough. They are 'discouraging' customers from depositing more by giving ridiculously low interest rates...doesn't seem to matter. It just keeps coming into MMs, CDs, & IRAs. Also, their CC portfolio is running-off more every month. So, many people are having the same discussion as you & your DH.

/tricia

To follow on with what Tricia said. Suzie Ormon was on Larry King the other night and she said that one should pay their credit card off first becasue of the interest rates. Nothing else is going to pay you 19% or more !!!!

However, she said if there is any chance, even a remote chance, that you could lose your job you should save the money as a contingency for survival rather than pay off credit cards. Just goes to show you how bad things are when stashing cash is preferable to paying down debt.

We haven't felt the pinch personally but things aren't quite as bad here in Canada........yet. Our investment savings have taken a huge hit but luckily we have very good pensions and no debt so we don't need to touch that money. Mind you it was suppose to be for travel so that will likely be curtailed somewhat. Given the times I can't whine about that!!!

I agree with Linda, this has been devastating to people who are retired, worked hard all their lives and need their investments to live on. Very sad. Equally hard on people with young families who have lost their jobs and have no prospects. My heart breaks for them.

I worry about the kids. Both of them have just graduated university and I worry they will have a tough time finding jobs. That could mean a life style change I wasn't banking on....kids moving back home!!!

It's sad that it takes a crisis like this to encourage people to save for what ''might happen'' in their future. Sad, that it had to happen before the message was received. My lesson is that the closer we get to retirement age, the safer our assets need to be.

Lars, it's good to hear someone is benefiting from these crazy times!

The biggest effect for us is the stress factor. DH works for a Chevrolet dealership and itÂs been really hard on him. Not so much the money issues but the employee issues. He has had to lay off a few and cut hours for the rest. He worries that the younger guys may fall thought the cracks and lose everything. They all work on commission and itÂs been really bad the last few months. He did ask them if they would be willing to work a few less hours a month to save someoneÂs job and they all said yes. They feel itÂs a group effort so attitudes are good.

Like everyone our 401 tanked but we have the bulk of our retirement in CDÂs. Retirement is less than a year and a half away if all goes as planned. It will probably be sooner if DH loses his job. I think our retirement will be quite different than what we envisioned. We planned to live on interest and it just not there at this point. The good news is our house is paid off, 2 pretty new cars paid for and no outstanding bills. I have commercial real estate income going into a trust for me that I could tap into but itÂs never been part of our retirement plan. DH thinks itÂs my money not our money but he may change his mind on that in the future.

TriciaÂÂÂÂ

You say money is flying into the banks and they canÂt push it out fast enough. Where are they pushing it to? They donÂt seem to be loaning anyone much. DH was at work last Saturday he said the show room was full with people wanting to buy cars but very few could get financing. One guy had a credit score of 840 and they, the bank, told him he had to put more down and his interest rate would be 14%! He did buy the car but paid cash. Good for the store but how does that help the economy?

Claudia

Yeah, we are vacilating between saving or getting rid of the CC debt. Fortunately, nothing is over its limit, it's the debt that makes me nervous. We could have one CC completely paid off in 6 months if we really buckled down.

On one hand, if either one of us were to lose our job, we would need the cash to get by. On another hand, the CC debt is a liability. At any other time, it would be a no-brainer...pay down the debt first.

Both of our jobs are about as stable as anyone elses these days. Both of our companies have had layoffs. I definitely believe these are not "normal times" so I'm leaning towards the saving the cash. But it is tempting to say "Whew, one less bill."

The stress factor, for sure. Stress about the possibility of losing my job. Stress over watching my savings disappear. Stress over what to do with the money that's left. Stress over how I'll get by without a job -- I can live on air but my house and car can't.

Stress over my friends' stress! One lost her a job a few years ago and has not been able to find another. Another one is having survivor's guilt over a co-worker who was axed when it could have been her.

I feel paralyzed. I am afraid to buy anything for fear I will need the money in the future. Then I worry that my car will have a meltdown and I will kick myself for not replacing it. I am in a vicious cycle of worry worry worry!

I am also sad that if I stay employed, I won't be able to retire when I want and that my retirement will not include the travel that I had planned.

I am also sad that I postponed things I might have liked to do in order to save for the future. I should have just spent the damn money. It would have been better than watching it go up in smoke.

Sheesh -- what a way to live! In case you can't tell, this really touched a sore spot with me!

Claudia,

I think CA banks are struggling more than some areas of the northeast. Overall, underwriting is more difficult today as banks return to the standard "5-Cs" of lending.

The problem is that DH's institution never did make subprime nor even Alt-A loans; so their borrower pool hasn't changed. They have lots more cash to lend out & not more qualified borrowers. Since the majority of their deposit customers are these same prime borrowers & those people have cash...they're bringing it into the bank in wheelbarrels!

They've been flooded with lower quality applications from people denied at other places (subprime & a lot of Alt-As). That's chewing up his staff time but producing no results.

Where are they putting the cash? Most of it's going to Treasuries & returning virtually zero. They're struggling with balancing assets to liabilities. They made a profit in 2008 but income will be down this year because they just aren't able to get enough loans made.

/tricia

I live in Michigan where recession is a way of life. I built my home because I could not afford to buy one. I planted my christmas tree fields by hand because I didn't own a tractor. I can do more mechanical work to car to keep it going then I care to admit. Never married or had children because I couldn't afford it. I've worked third shift of Christmas Day because it was money. I've driven two hours to Grandma's house for Thanksgiving dinner and then drove back home so I could work. I've taken a gal on a date with just enough money for two cups of coffee. I sew nice buttons on cheap blouses to make them look special. In the past I've shopped for cars that had dents in them because dents don't affect their use as transportation but they sell cheaper then cars without dents.

My lunch today is roadkill... blackened venison. Skinned and butchered the deer myself rather then pay. I've had enough practice that it takes only a couple hours. I'm "bunnyman" because I had a large herd of meat rabbits for years.... working rabbits as I called them. I know how to fish using just a length of line and a baited hook... baited with bugs or worms I find as I need them.

I'm probably better off then most. I still have equity and credit enough for the bank to renew my revolving account. As of yesterday I have two new front teeth!... so I can look pretty if I have to interview for a new job.

Some poverty is bad like not having dates or children. Some of it is good like learning to make homemade soup. My motto has always been something like "do it or die trying".... not the best motto. I don't sleep well. My back is broke in two spots... maybe three.

At the moment I'm eating cajun venison and pea soup... feeling like I've got it under control... at least for the next 60 seconds. Probably the best advice I can give people is to get your sleep... you will need it.

: )
lyra

In some way or another we are all affected. Homes devalued, retirement accounts shrinking, jobs lost, etc.
I feel for the entire country.

We are in pretty good shape. No mortgage, no CC debt, just one car payment. That said, we took out a HELOC last spring, for about 25% of our homes value, with the idea of doing some remodeling. We still are planning on doing some of that but are really going slow. Our contractor has been tied up with a big job this winter so we are just sitting back and waiting for him. We really want to use him, excellent work at a very reasonable price. We are planning on just taking it step by step with this economy. Lucky for us to be located where we are. Property values for lakefront have been holding up well around here.

We made the decision to move here ten years ago, knowing it's where we wanted to spend retirement. Since then I've become semi-retired, a little sooner than planned. Kim still has 10+ yrs to work and feeling real lucky to be in medicine at this stage.

Nancy

There are effects even for those of us who are in fairly good financial shape.

For example, last fall our roof needed to be replaced. We knew that was coming and had the money already saved. Because of the state of the economy, we were particularly careful in choosing a contractor. We chose a firm that had been in business in our area for a long time with a very good reputation. We checked the state for complaints against the contractor's license. They had certifications for their training and quality of work from the shingle manufacturers.

They started promptly once there was a rain free window in the weather prediction. They did the work well. When the roof was finished, they pointed out to us one area where the shingles were defective probably due to improper storage. They got the manufacturer's rep out, got new material and replaced that part. The roof looks great and we've had enough rain to test it. Everything seemed fine.

About 3 months pass and a lien from the material supplier arrives in the mail. Apparently, some clients on jobs before us didn't pay. The roofing company has been using payments from later clients to pay for materials for earlier jobs so that they can keep going. With jobs or payments not coming in fast enough they didn't manage to pay for materials our job (and a bunch of others) before the 90 day terms passed with the supplier. They are working to get money from the clients that didn't pay and are succeeding with some. They say that they will be able to pay for our materials next week. That would be well before anything happens on the lien.

We are hoping this will have a happy ending for us. We shouldn't have to pay for our roof material twice. But even with the best of care, we could have been left holding the bag if too many clients of the roofer didn't pay.