Okay, it's not the same currency but we're experiencing a drop in prices this side of the pond. Certainly in the travel industry. I'd say on average hotel prices were down 15% across Europe and there's a lot of bargaining to be done.
Hi Phillip - Yes, FEAR is such a supreme motivating factor. Fear of getting laid off made my apply and attend business school part-time for 3 years. Fear of not being able to pay my mortgages and going into a deep debt hole is what keeps me coming into work on time and busting my butt.
But this is good fear I believe. A fear that solidifies discipline and my work ethic. For I might as well try as best as I can early in life, then when later when I'm too tired.
I have made a conscious choice to no longer be a wage/debt slave after 20 years of work. Just have 10 more years to go!
Compared to a year ago, items that you might buy everyday will have gone up. The local Coffee shop has rose their price of their Weekly special from 99 cents to $1.59. My favorite places to eat all have little marks on their menus, increasing the prices of all of their dishes. A little cafe I frequent gives a 12 oz cup with their combos instead of a 20oz drink.
At the same time, when there are deals, there are deals. A local used movie/cd store had a deal, Buy $50 worth of items, get a $25 discount on your next purchase. A local bookstore gave out free paperbacks with any hardcover purchase.
So can a dollar buy you the same it did a year ago? It depends on what you're shopping for. When you buy small, they nickel and dime you here and there. But when you're dropping $1000 on a new laptop, expect $300 of extras.
Since the recession began it seems like many businesses are working harder to get/keep customers by offering more inexpensive items (more dollar menus at food establishments, dollar aisle items in mass merchandise stores, etc.).
I think there are way too many "bad" examples out there for sure! We need to stop trying to keep up appearances that we can't afford. I hope that some day it will be "cool" to be a saver and not an unconscious spender. Parents need to set the foundation for their children, they need to be role models and truly walk the walk. Give the kids the financial tools they need and then let them do with it what they will. I wonder, do credit card companies still set up booths at colleges? This seems like a major pitfall to me for those that don't understand the impact of how long they will be working to pay off those cards. It seems like free money to alot of kids, especially if they have never had access to credit like that. Seems shady to me...if it's still common practice.
As a college student, I have no idea about purchasing power vs. a year ago when it comes to groceries. I never had to buy them until last year, and you can't really compare prices at a chain store on Chicago's north side to a suburban family owned place (I regularly shop at both, depending on where I am).
Retailers are tripping over themselves to offer you a good deal. I went into a Crocs store recently (to buy the non-foam shoes, ok?). They were out of my size, and without skipping a beat the saleswoman offered me free shipping and 10% off on the site. I don't think that would have happened a year ago, therefore, I think your dollar is worth more.
I have lost 50% of my income (I have been in advertising and marketing at 100% commission for almost 6 years). I have an education degree but can't get a job with the school system because they are on a hiring freeze. I have struggled the past year to pay and keep ALL of my bills current. I called BOA to let them know that for the first time I was facing paying my June mortgage payment past the 15th and was extremely worried about it affecting my credit. They informed me that I had till the last day of the month to pay it and it would not affect my credit. She referred to me to a guy that took all of my financial information. He told me that I qualified for Obama's loan modification program. I sent them all of the information that they requested and just this week (about 2 weeks after they received my info) called to follow up and the guy asked me if I was behind on any of my credit cards. BECAUSE I SAID NO HE SAID I DON'T QUALIFY NOW!!! It is funny to me that they want me to not pay my credit card bills but my credit card companies have all been very understanding with my financial situation and have put me in hardship programs so that I can keep current with all of them. Why would I stop paying them???? I told BOA to please note in their computer that I won't be making July's payment and maybe then they will offer me some help!!! This is pathetic!!!
A very good point from Guy Barbato about the various pros and cons of organic growing and small flocks.
That sort of critical view is very useful, as I think it's important to look carefully at all sides of the equation when making choices. When we get our chickens, I'll be sure to get expert advice on health issues.
I spoke to a stonefruit grower who said that there were big problems with certain fungal infestations that apricots get, and there was no organic method of treatment. The chemical method was effective and safe, but rendered the produce uncertifiable. It's unfortunate that when dealing with a large scale, things like a grower doing their best to minimise chemical use can't be taken on trust, so the 'next best' route isn't workable.
I'm never keen on legislation that puts blanket bans on things or limits choice in any way. What I love is this trend for us to become informed consumers, and laws that force manufacturers to say exactly what is in their products.
When we put our trust in the Lord who created us in the first place we will have gained something the world cannot give, complete peace. We worry because we do not trust. We fear because we do not believe. We of course must do the physical things to be on the right path but without faith we can do nothing. We should simply put our hand into the hand of our creator, God and just walk along enjoying the scenery along life's way.
Good question... Those who got really burned and lost a lot might change permanently, or at least live more frugally. The 90%+ still employed might keep the habits/tricks they realized aren't so bad, but it's only natural to spend more when we feel richer. Others haven't learned a thing so as long as they've got space on their credit card they'll use it.
Overall the economy probably won't be quite as strong as it was the last few years. People, businesses and governments all learned one thing last year: the great depression could happen again, because our economy is more fragile than we thought. I think this fact alone will keep people, businesses and governments just a tad bit more responsible than before, on the whole. At least for a few years.
Was it really the $60,000 in debt that taught you? Or was it just as much your life experience up to that point? It sounds to me like you already knew what to do--not that having the debt didn't make you learn some money-management skills, but it doesn't sound like you ever thought that you should follow the conventional path of paying off your student loans over ten years, the way so many people do.
It's actually this idea--that debt is a useful motivator to get people to work hard and to learn how to manage their finances--that bugs me. Why can't people work hard because they see things that need doing and because they seek out things that they want to do? Why can't people learn how to manage their finances by watching their parents and their parents' friends, by listening to the parents and their teachers, by reading books and magazines, by learning from the cultural stories with role models good and bad? (I mean, obviously that is exactly how people do learn how to manage their finances--they just learn bad ways to manage their finances because so many of the examples out there are bad. But they don't need to be.)
Philip--AMEN, AMEN AND AMEN! I have a long background in the credit industry and can support what you've written down to the last detail. (In fact I have written on exactly that!).
I've seen countless examples of young people with large student loans snowball into greater debt in pursuit of the 'American Dream', which seems to have morphed into a comfortable life in the suburbs, complete with an oversized house, two late model cars, an annual vacation (or two), regular meals outside the house, an expensive college education for the kids, etc, etc.
Newsflash: the prototypical American Dream lifestyle is not affordable on the typical American household income. And that's where debt comes in; it's being used to cover the difference.
If I can add a point on the mortgage side--one of the downsides of a mortgage, especially in a down economy such as we're now experiencing, is that the homeowner has less flexibility to make a move to pursue better employment opportunities in another state. The mortgage acts as an anchor, especially when housing isn't very liquid, and at the very time you might need to make a job related move. In a real way, it impairs the ability to make a living. Most people look past this because it's a non-factor when the economy is good and jobs in the local area are plentiful.
But as you said, these things aren't taught in school, so people have only one way to learn them--the hard way.
Certain items are less--gasoline certainly, and if you're looking to buy a house, definately. Food (some items higher, some lower) and fast food meals seem to be about where they were a year ago. There are deals out there on furniture, computers, etc,--the discretionary purchases--but it seems the more important categories are up relentlessly.
Someone mentioned postage stamps (good one), but add in the following to the increase category: health insurance, car insurance (ours jumped 20% due to a regulartory change), utilities, anything medical, anything education, car repairs, movie tickets (up about a dollar per year), sales tax, real estate taxes, homeowners insurance, and fees for childrens sports activities in our area seem to go up about 10% each year.
Someone also mentioned paying the same for less quantity or service--seems to be common these days.
If this is the 'deflation' we're being told about, we're all gonna get smoked when prices start rising. (Don't stop visiting personal finance sites!!!)
It doesn't go very far now days. I used to find bargains at the Dollar Bargain Store. Now it's not called the "Dollar Bargain Store" anymore, just "Bargain Store". Still it's cheaper than most big name grocery chains.
Everything has gone up in price it seems! When we go out to fast food places-we do order from the $1 menu! I mean you can't really beat that for a cheap meal! :) Also, at Burger King, call the survey # on the back of your receipts and get a FREE Whopper or Chicken sandwich--I'm not sure a lot of people know about this!! I do it all the time and I can get my drink, onion rings and chicken sandwich valued at $3.29(free)! Plus, free refills on drinks! Comes to only $2.12. :)
Food prices across the board are soaring right now, almost to the point that junk food and healthy food cost the same! Gas on the other hand has definitely become more affordable this year, which is good because my husband has been laid off and rehired by the same company (not typical in his line of work) 6 months ago and now has had to take a pay cut on top of more work. The dollar is harder to earn and in general is worth less then it was before (which is such an oxymoron)
Yes and No.......If you are at the lower end of the pay scale it is a repeat (if not worse) of the scenario in the mid 70s...High unemployment, high rent/utilities etc.. Grocery prices, at least in our area, are much higher than one year ago. Come to think of, a pound of hamburger was $0.29 in the mid-70s, and the minimum wage somewhere around $3.40. Now I buy hamburger at $1.39, and that's the price for the stuff close to the "sell-by date".
If you are a higher wage earner and established you can find bargains galore starting from almost new motor homes to cheap vacations, plane tickets, etc..
Like my mother said 50 years ago - it takes money to make money, and she was (is) so right
I think you've put your finger on why the system is set up this way. Buried underneath everything else is the fear that, if people weren't in debt, they wouldn't get up and go to work every day.
It's kind of why I'd like to see things changed. As things stand, a lot of people have to worry that any little mistake could cost them all their wordly goods and their entire future. If things were different--if most people had a comfortable emergency fund and little or no debt--they'd be in a lot better position to insist on fair treatment, to pick and choose among the alternatives on offer, to tell psycho bosses that they need to find a new sucker. I think we'd all be better off. (Except the psycho bosses, who'd have to either learn to play well with others or else do a lot more of their own work.)
It's true that debt seems to be inevitable. I wish I had known at a younger age that it didn't have to be like that with basic financial principles such as tracking your earnings, budgeting and being frugal.
But I am HAPPY that I was $60,000 in debt from student loans. (Never had CC debt)
3) The basics of personal finance. Such as tracking money, being careful, budgeting etc.
Now less than a year after I cleared my debt, I now have a net worth of $70,000 or so. :)
I feel a slight bit of sickness when I think that I could be at $100k + right now (I'm 26) but .. I think I'm doing pretty good.
As for future debt such as a mortgage or kid's educations, I plan on not incurring any. I want to try and buy a home outright in cash (50%, BF pays the other half), and my kids are going to learn the same way I did -- with scholarships, loans.. and if I have the means at the end, I will clear their loans in full if they have proven to be good students & responsible kids in clearing their debts.
The dollar seems to be worth more in some instances because we have been forced to zero in on every dollar spent. Houses cost less, rents are lower, gas is cheaper, milk is affordable, etc. The same items last year this time at the Dollar Tree that i purchased (chips, cleaning supplies, deo sprays, salami, etc.) are the same $1 this year for the same size and brand. A year ago even rice and beans, the ultimate meal, became expensive but fast forward to 2009 and we can afford to buy rice again in bulk and not worry about creating shortages and price spikes:)
Without debt, we wouldn't be able to live beyond our wildest dreams. But, seriously... debt is what keeps a lot of people honest, ironically. I don't think anybody really needs a lot of money to survive. With debt, one keeps focused for the life of the debt to pay it off.
Nickel and Dimed, I am impressed you were able to rack up $36,000 in CC debt. I hope to someday have CC companies allow me to borrow so much ;) I wrote about Controlling The Urge To Splurge last night. You might enjoy it.
It is difficult, I've struggled with credit card debt for years. I have historically had a hard time with impulse buys but I did dig myself out of $36,000 in debt by being quite frugal. Now with my home, I bought frugal, buying a home that was about half of my gross earnings in a single year. I was able to pay that off within a couple of years. It really is the nickel and diming that keeps kicking my butt, not the big stuff.
Listening to classical music while taking a walk in a quiet park is an awesome way of de-stressing!
Wow, I never knew that people actually sell and buy such things! That's interesting.
Okay, it's not the same currency but we're experiencing a drop in prices this side of the pond. Certainly in the travel industry. I'd say on average hotel prices were down 15% across Europe and there's a lot of bargaining to be done.
Hi Phillip - Yes, FEAR is such a supreme motivating factor. Fear of getting laid off made my apply and attend business school part-time for 3 years. Fear of not being able to pay my mortgages and going into a deep debt hole is what keeps me coming into work on time and busting my butt.
But this is good fear I believe. A fear that solidifies discipline and my work ethic. For I might as well try as best as I can early in life, then when later when I'm too tired.
I have made a conscious choice to no longer be a wage/debt slave after 20 years of work. Just have 10 more years to go!
Best,
RB
Compared to a year ago, items that you might buy everyday will have gone up. The local Coffee shop has rose their price of their Weekly special from 99 cents to $1.59. My favorite places to eat all have little marks on their menus, increasing the prices of all of their dishes. A little cafe I frequent gives a 12 oz cup with their combos instead of a 20oz drink.
At the same time, when there are deals, there are deals. A local used movie/cd store had a deal, Buy $50 worth of items, get a $25 discount on your next purchase. A local bookstore gave out free paperbacks with any hardcover purchase.
So can a dollar buy you the same it did a year ago? It depends on what you're shopping for. When you buy small, they nickel and dime you here and there. But when you're dropping $1000 on a new laptop, expect $300 of extras.
Since the recession began it seems like many businesses are working harder to get/keep customers by offering more inexpensive items (more dollar menus at food establishments, dollar aisle items in mass merchandise stores, etc.).
I think there are way too many "bad" examples out there for sure! We need to stop trying to keep up appearances that we can't afford. I hope that some day it will be "cool" to be a saver and not an unconscious spender. Parents need to set the foundation for their children, they need to be role models and truly walk the walk. Give the kids the financial tools they need and then let them do with it what they will. I wonder, do credit card companies still set up booths at colleges? This seems like a major pitfall to me for those that don't understand the impact of how long they will be working to pay off those cards. It seems like free money to alot of kids, especially if they have never had access to credit like that. Seems shady to me...if it's still common practice.
As a college student, I have no idea about purchasing power vs. a year ago when it comes to groceries. I never had to buy them until last year, and you can't really compare prices at a chain store on Chicago's north side to a suburban family owned place (I regularly shop at both, depending on where I am).
Retailers are tripping over themselves to offer you a good deal. I went into a Crocs store recently (to buy the non-foam shoes, ok?). They were out of my size, and without skipping a beat the saleswoman offered me free shipping and 10% off on the site. I don't think that would have happened a year ago, therefore, I think your dollar is worth more.
I have lost 50% of my income (I have been in advertising and marketing at 100% commission for almost 6 years). I have an education degree but can't get a job with the school system because they are on a hiring freeze. I have struggled the past year to pay and keep ALL of my bills current. I called BOA to let them know that for the first time I was facing paying my June mortgage payment past the 15th and was extremely worried about it affecting my credit. They informed me that I had till the last day of the month to pay it and it would not affect my credit. She referred to me to a guy that took all of my financial information. He told me that I qualified for Obama's loan modification program. I sent them all of the information that they requested and just this week (about 2 weeks after they received my info) called to follow up and the guy asked me if I was behind on any of my credit cards. BECAUSE I SAID NO HE SAID I DON'T QUALIFY NOW!!! It is funny to me that they want me to not pay my credit card bills but my credit card companies have all been very understanding with my financial situation and have put me in hardship programs so that I can keep current with all of them. Why would I stop paying them???? I told BOA to please note in their computer that I won't be making July's payment and maybe then they will offer me some help!!! This is pathetic!!!
Very nice post, thanks so much for sharing.
A very good point from Guy Barbato about the various pros and cons of organic growing and small flocks.
That sort of critical view is very useful, as I think it's important to look carefully at all sides of the equation when making choices. When we get our chickens, I'll be sure to get expert advice on health issues.
I spoke to a stonefruit grower who said that there were big problems with certain fungal infestations that apricots get, and there was no organic method of treatment. The chemical method was effective and safe, but rendered the produce uncertifiable. It's unfortunate that when dealing with a large scale, things like a grower doing their best to minimise chemical use can't be taken on trust, so the 'next best' route isn't workable.
I'm never keen on legislation that puts blanket bans on things or limits choice in any way. What I love is this trend for us to become informed consumers, and laws that force manufacturers to say exactly what is in their products.
Can't wait to see the movie!
When we put our trust in the Lord who created us in the first place we will have gained something the world cannot give, complete peace. We worry because we do not trust. We fear because we do not believe. We of course must do the physical things to be on the right path but without faith we can do nothing. We should simply put our hand into the hand of our creator, God and just walk along enjoying the scenery along life's way.
Good question... Those who got really burned and lost a lot might change permanently, or at least live more frugally. The 90%+ still employed might keep the habits/tricks they realized aren't so bad, but it's only natural to spend more when we feel richer. Others haven't learned a thing so as long as they've got space on their credit card they'll use it.
Overall the economy probably won't be quite as strong as it was the last few years. People, businesses and governments all learned one thing last year: the great depression could happen again, because our economy is more fragile than we thought. I think this fact alone will keep people, businesses and governments just a tad bit more responsible than before, on the whole. At least for a few years.
@ FB:
Was it really the $60,000 in debt that taught you? Or was it just as much your life experience up to that point? It sounds to me like you already knew what to do--not that having the debt didn't make you learn some money-management skills, but it doesn't sound like you ever thought that you should follow the conventional path of paying off your student loans over ten years, the way so many people do.
It's actually this idea--that debt is a useful motivator to get people to work hard and to learn how to manage their finances--that bugs me. Why can't people work hard because they see things that need doing and because they seek out things that they want to do? Why can't people learn how to manage their finances by watching their parents and their parents' friends, by listening to the parents and their teachers, by reading books and magazines, by learning from the cultural stories with role models good and bad? (I mean, obviously that is exactly how people do learn how to manage their finances--they just learn bad ways to manage their finances because so many of the examples out there are bad. But they don't need to be.)
Philip--AMEN, AMEN AND AMEN! I have a long background in the credit industry and can support what you've written down to the last detail. (In fact I have written on exactly that!).
I've seen countless examples of young people with large student loans snowball into greater debt in pursuit of the 'American Dream', which seems to have morphed into a comfortable life in the suburbs, complete with an oversized house, two late model cars, an annual vacation (or two), regular meals outside the house, an expensive college education for the kids, etc, etc.
Newsflash: the prototypical American Dream lifestyle is not affordable on the typical American household income. And that's where debt comes in; it's being used to cover the difference.
If I can add a point on the mortgage side--one of the downsides of a mortgage, especially in a down economy such as we're now experiencing, is that the homeowner has less flexibility to make a move to pursue better employment opportunities in another state. The mortgage acts as an anchor, especially when housing isn't very liquid, and at the very time you might need to make a job related move. In a real way, it impairs the ability to make a living. Most people look past this because it's a non-factor when the economy is good and jobs in the local area are plentiful.
But as you said, these things aren't taught in school, so people have only one way to learn them--the hard way.
Certain items are less--gasoline certainly, and if you're looking to buy a house, definately. Food (some items higher, some lower) and fast food meals seem to be about where they were a year ago. There are deals out there on furniture, computers, etc,--the discretionary purchases--but it seems the more important categories are up relentlessly.
Someone mentioned postage stamps (good one), but add in the following to the increase category: health insurance, car insurance (ours jumped 20% due to a regulartory change), utilities, anything medical, anything education, car repairs, movie tickets (up about a dollar per year), sales tax, real estate taxes, homeowners insurance, and fees for childrens sports activities in our area seem to go up about 10% each year.
Someone also mentioned paying the same for less quantity or service--seems to be common these days.
If this is the 'deflation' we're being told about, we're all gonna get smoked when prices start rising. (Don't stop visiting personal finance sites!!!)
It doesn't go very far now days. I used to find bargains at the Dollar Bargain Store. Now it's not called the "Dollar Bargain Store" anymore, just "Bargain Store". Still it's cheaper than most big name grocery chains.
Everything has gone up in price it seems! When we go out to fast food places-we do order from the $1 menu! I mean you can't really beat that for a cheap meal! :) Also, at Burger King, call the survey # on the back of your receipts and get a FREE Whopper or Chicken sandwich--I'm not sure a lot of people know about this!! I do it all the time and I can get my drink, onion rings and chicken sandwich valued at $3.29(free)! Plus, free refills on drinks! Comes to only $2.12. :)
Food prices across the board are soaring right now, almost to the point that junk food and healthy food cost the same! Gas on the other hand has definitely become more affordable this year, which is good because my husband has been laid off and rehired by the same company (not typical in his line of work) 6 months ago and now has had to take a pay cut on top of more work. The dollar is harder to earn and in general is worth less then it was before (which is such an oxymoron)
Yes and No.......If you are at the lower end of the pay scale it is a repeat (if not worse) of the scenario in the mid 70s...High unemployment, high rent/utilities etc.. Grocery prices, at least in our area, are much higher than one year ago. Come to think of, a pound of hamburger was $0.29 in the mid-70s, and the minimum wage somewhere around $3.40. Now I buy hamburger at $1.39, and that's the price for the stuff close to the "sell-by date".
If you are a higher wage earner and established you can find bargains galore starting from almost new motor homes to cheap vacations, plane tickets, etc..
Like my mother said 50 years ago - it takes money to make money, and she was (is) so right
@ RB:
I think you've put your finger on why the system is set up this way. Buried underneath everything else is the fear that, if people weren't in debt, they wouldn't get up and go to work every day.
It's kind of why I'd like to see things changed. As things stand, a lot of people have to worry that any little mistake could cost them all their wordly goods and their entire future. If things were different--if most people had a comfortable emergency fund and little or no debt--they'd be in a lot better position to insist on fair treatment, to pick and choose among the alternatives on offer, to tell psycho bosses that they need to find a new sucker. I think we'd all be better off. (Except the psycho bosses, who'd have to either learn to play well with others or else do a lot more of their own work.)
It's true that debt seems to be inevitable. I wish I had known at a younger age that it didn't have to be like that with basic financial principles such as tracking your earnings, budgeting and being frugal.
But I am HAPPY that I was $60,000 in debt from student loans. (Never had CC debt)
VERY happy.
Why?
Because it forced me to learn:
1) How to take care of my money and clear my $60k of debt in 18 months earning $65,000/year gross.
2) How to be a conscious spender and budding minimalist (see my post on my small, cheap digs here)
3) The basics of personal finance. Such as tracking money, being careful, budgeting etc.
Now less than a year after I cleared my debt, I now have a net worth of $70,000 or so. :)
I feel a slight bit of sickness when I think that I could be at $100k + right now (I'm 26) but .. I think I'm doing pretty good.
As for future debt such as a mortgage or kid's educations, I plan on not incurring any. I want to try and buy a home outright in cash (50%, BF pays the other half), and my kids are going to learn the same way I did -- with scholarships, loans.. and if I have the means at the end, I will clear their loans in full if they have proven to be good students & responsible kids in clearing their debts.
The dollar seems to be worth more in some instances because we have been forced to zero in on every dollar spent. Houses cost less, rents are lower, gas is cheaper, milk is affordable, etc. The same items last year this time at the Dollar Tree that i purchased (chips, cleaning supplies, deo sprays, salami, etc.) are the same $1 this year for the same size and brand. A year ago even rice and beans, the ultimate meal, became expensive but fast forward to 2009 and we can afford to buy rice again in bulk and not worry about creating shortages and price spikes:)
Without debt, we wouldn't be able to live beyond our wildest dreams. But, seriously... debt is what keeps a lot of people honest, ironically. I don't think anybody really needs a lot of money to survive. With debt, one keeps focused for the life of the debt to pay it off.
Nickel and Dimed, I am impressed you were able to rack up $36,000 in CC debt. I hope to someday have CC companies allow me to borrow so much ;) I wrote about Controlling The Urge To Splurge last night. You might enjoy it.
Rgds,
RB
It is difficult, I've struggled with credit card debt for years. I have historically had a hard time with impulse buys but I did dig myself out of $36,000 in debt by being quite frugal. Now with my home, I bought frugal, buying a home that was about half of my gross earnings in a single year. I was able to pay that off within a couple of years. It really is the nickel and diming that keeps kicking my butt, not the big stuff.