But, my question is, “What have we learned as individuals?”  Basically, the way I see it, we’ve got two problems going on, what the government has done to us economically, and what we’ve done to ourselves.

In this last year, many of our own budgets have been cut, due to tanking investments, job loss or benefit reduction. Permanent personal recovery will take time and effort for a lot of folks. It will also take a change in behavior on the parts of consumers.

I happen to agree with David Walker’s take on the world. In case you were sleeping in a cave these last few years, Mr. Walker was one of the original harbingers of economic doom clear back in the Bush years. I call him a prophet. As former Head of the U.S. Government Accountability Office (GAO), he predicted the very situation we’ve been facing in 2009, including the health care crisis, over spending, the near demise of the value of our dollar, etc.

When I’ve listened to David Walker, I see many correlations in the federal crisis and in our own financial situations. Nearly every issue the country has faced or is facing fiscally is similar to our personal cash crunch.

That’s why I reiterate the question, “What have we personally discovered from the economic crisis?” The adage, “Those who do not learn from history are destined to repeat it,” comes to mind.

Here’s what I think we should have learned by 2009’s brush with fiscal death:

Our personal spending habits need to change. Let me give you an example: I’ve got a friend whose husband currently nets a salary of over 65K as a professional. She’s working as a nurse full time and as a QMA part time. With a combined income of over 100K annually, they’re considering filing bankruptcy. My friend’s had no major medical issues, or giant fiscal shift, except for a freeze on commission bonuses for the last year at her husband’s work. Maybe I’m crazy, but if you can’t live on a 100K a year, in my book, you don’t deserve that kind of money. Or you need to go to a financial boot camp to be re-educated. In spite of my friends’ economic issues, they have a skiing trip planned and are forever remodeling. They’re still spending furiously,(but now on credit, without paying it off in full). Every purchase is “the last big one” and every month it continues. It’s hard watching a friend do this to herself. I’m fighting the urge to have an intervention on her behalf. This case is not isolated, by the way. According to prophet, David Walker, “Americans are living beyond their means.” It’s true. If all we learned from this last two years was to put our purchases on credit cards and take out extra loans, then we’ve learned nothing.

Americans need to proportion their spending in line with their budget. In spite of how tempting “Cash for Clunkers” or how attractive the current mortgage rates are, we still need to hang onto our money or make best use of it. Buy a used car in cash, the old fashioned way. Take advantage of the mortgage rates, but buy down from what you think you can afford, to what you know you can easily afford (including renovations, insurance, taxes and utility bills for said home). Like the government, endlessly spending (albeit even for some very altruistic programs)- if you can’t afford it, you don’t do it.

Credit and lenders are not the devil. Our own impulses are. It’s not the banks that got us in trouble. And it’s not the credit cards. It’s our misuse of them. Had we turned down banking offers to re-finance or dampened our spending, much of the fiscal damage that occurred in these 2 years would have been a tremor to the economy instead of a giant earthquake. I know many people who don’t abuse credit cards and actually make money using them, via rewards and cash back programs. My own paternal grandpa was a banker and a farmer. He’s in his late 80’s, and has a very modest home. I’m guessing at one time he could have made a shift to an upscale place, but he didn’t. I think his furniture is dated, circa 1970. Grandpa’s made good choices, curbed fiscal impulses and along the way, even had opportunity to help others.

 Place less value in stocks and more value in savings. I’m going to get dragged outside the city gates and stoned for this one. But, none-the-less, I believe it to be true. The thing is, we want our money to grow. We all desire a retirement nest egg, right? So stocks seemed like the easy way to keep spending, while still acquiring that nest egg.However, if you’ve got cash, you’ve got cash. Ain’t no one gonna take it away. Let the economy fall to its knees, and you’ll go on. The reality is, interest rates in savings accounts are barely existent.  Even the online banks, who offer “great rates” aren’t too impressive. So to save for retirement, in a traditional means, is to truly cut spending today. Your money won’t quadruple in four years, like some stocks have in the past. You’ll have to save more. But money in the bank also won’t collapse, costing your home and leaving you penniless for retirement, either. (At least there’s a federal guarantee if the bank goes belly up). I’m not saying stocks and money market funds are a totally bad idea.  I’m just commenting that we need to curtail how much value we place in a risky business, compared to good old fashioned savings. If the money fairy ever blesses me with extra cash, I’d be open to a few stocks. But I’d be sure to have savings built up first. Stock investing would be money I’d be open to lose if it came to it. (I think I’d rather invest in a good pair of Italian shoes, actually. At least those won’t lose their rich Corinthian Leather smell).  

Say “NO,” wait on purchases, be frugal as a permanent way of living. Some folks have learned this year. Their fiscally penitent at the moment, taking the pledge to never overspend again. But I wonder how this will look in four or five years? Are these same individuals going to go nuts with spending again? Let coupon shopping, buying bargains, and being frugal with fuel, utilities and expenses be a way of life, not a temporary fix. It also means saying, “No” to purchases. Or waiting on them. You’re offered a “free” upgrade on a cell phone, which actually costs you another hundred bucks? Say “no” unless your phone breaks and you’re S.O.L without it. Don’t just buy because it’s on sale, buy because you need it. And when you do have to purchase, shop for a great bargain. 

 Make your kids wait on stuff too. It’s ok that “all their friends” have something they don’t. If you’ll be strapped to purchase it, make kids wait. Trust me. I’ve got five kids who’ve waited all their lives for some luxuries. My very youngest a couple of years ago, (age 12) desperately wanted a Nintendo DS. As a parent, I’d loved to have bought one. She’s a good kid. But I couldn’t afford it. I already pay for struggling college kids’ car insurance and had just put braces on another child. My daughter took her Christmas money, from aunts and cousins, to Wal-Mart and bought a Nintendo on sale after the holidays. She’s treasured it since. She didn’t die because she waited almost two years after her friends had one. Your kids won’t die either.  

 Food for thought, while in the pre-recovery mode. I’ll leave you with David Walker’s words. In my opinion, greed, lack of fiscal accountablity, poor budgeting and spending beyond our means, are common demonimators we’ve shared with the government.  I know at one point, I’ve been guilty of all of them. But I’m trying to recover and relearn my own spending.  Let’s recover in the grassroots as well as federally.

 

 

 

 

Today I’d like to give you some facts, statistics, and ponderings on the mighty dollar.

These from the newsletter of the iconic, late Gary Halbert:

More of our fantasies are about money… than sex.

90% of Americans, who own pets, buy them Christmas gifts.

Money is the leading cause of disagreements in marriages.

65% of Americans would live on a deserted island all by themselves for an entire year for $1,000,000.

For $10,000,000 most of us would do almost ANYTHING! Including abandoning our family and friends and our church. A very high percentage of us would, for that same amount of money, change our race or sex. And, 1 in every 14, would even murder someone for ten million bucks.
What’s really strange about this is, the statistics remain the same whether it’s ten million dollars all the way down to three million. For three million bucks, most of us would do the same horrible things we would do for ten million. But, guess what? Few of us would do these things for a “measly” two million.

92% of us would rather be rich than find the love of our lives.

Let’s flip a coin and try to guess whether it will come up heads or tails. Three times as many people guess ‘heads’ than ‘tails’.

Here’s one I personally think really sucks: One out of every four Americans believe their best chance of getting rich is by playing the lottery.

How about this one for a shocking fact: 5% of lottery ticket buyers buy 51% of all tickets sold. (Trust me, none of these people belong to the “Einsteins of America Society”.)

A staggering 74% of us are influenced by how much we can win in a lottery as opposed to the odds of us winning.

That’s a good thing for the Government because the odds of winning a lottery jackpot are about 10 million to 1.

A person who drives 10 miles to buy a lottery ticket is 3 times more likely to be killed in a car accident while driving to buy the ticket… than… he is to win the jackpot.

Sunday newspaper coupon inserts are the second-most read section of the paper, after the front page.

Even though we are fascinated by money, we can’t seem to hang on to it..

From Legacy Educational Resources

Personal Savings At All Time Lows

“People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago…The 2006 figure (for savings) was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Depression.” (Associated Press, Feb. 5, 2007)  

What is this stuff we love so much?

From the  Digerati Life Blog-

How many times does “The United states of America” appear on a new $100 bill? The answer is twelve (two obvious appearances plus ten times around the oval). Franklin’s portrait is framed by an oval consisting of concentric rules, cross-hatching, and white space. Similar, though slightly different, ovals surround the portraits on all US bills. Using a magnifying glass, look at the outermost line of the oval. It turns out not to be a line at all but the repeated words “THE UNITED STATES OF AMERICA.”

Most people think the symbol for the US dollar is derived from the initials U and S superimposed on each other. Well this is false. It’s from the Spanish dollar sign. The US decided in 1782 that its basic unit of currency would be the Spanish dollar or peso. Its symbol was even then written as $, which was supposedly an ancient Phoenician sign indicating strength and sovereignty.

The Bureau of Engraving and Printing and is where U.S. money is made.
The Bureau prints currency on high-speed, sheet-fed rotary presses, which are capable of printing over 8,000 sheets per hour. The surface of the note feels slightly raised, while the reverse side feels slightly indented. Currency paper is composed of 25% linen and 75% cotton. Red and blue synthetic fibers of various lengths are distributed evenly throughout the paper. Prior to World War I the fibers were made of silk.

 Money it seems, does make the world go around, at least in the hearts and minds of Americans.  This week, as I transition from one aspect of life to another and work up a viable budget, I’d like to share some budgeting tips.  I am making a budget spreadsheet this weekend, and tracking my ugly debt online from this point forward. I calculated last night my medical bill debt, spread out over 13 creditors is something like $24K. Maybe your budget is off due to credit cards or other financial constraints. I’ve found some great resources to share with you regarding debt management. Let the buck stop here.
Here is an excellent link to begin your budget spreadsheet:

If this isn’t enough, toss in all those television informational promises for the home worker.

Certainly there are legitimate means to make money at home, right? A lot of us on a budget would enjoy either additional income.  Generating cash while saving on fuel and mileage from the comfort your home? What’s not to like?

 Are there real possibilities of making money on Work at Home ideas?  I believe there are.  

One reputable means to earn some Work at Home cash is freelance writing:

Take a gander at all the websites out there. Someone’s gotta write all that content, don’t they? Typically, it’s not the owner of the site. With billions of sites, there are endless possibilities for writers.  Finding these jobs takes a little knowledge and a lot of time.

Some to try, from personal experience: Craig’s List, Helium, and Elance.

• Craig’s List: I’ve picked up several writing projects on Craig’s List. It’s not a difficult process to search for jobs, and it’s free. Just be on guard for non-specific postings. A real job will never ask your banking account number and offers particulars about writing. Don’t be afraid to call the company or ask for website information.  There are scammers on this site so use common sense.

• Helium.com is a fine place for generating income. The most profitable avenue for earning on Helium is the Marketplace. Publishers in Marketplace post article requirements, such as word count, audience, and SEO’s. Most articles pay between $30- $80, with a few at or above $200.00. The site is friendly and community based. You will love it there. I’ve found it a great way to learn the writing process for online content. Additionally, your profile gives added exposure as a writer.

• Elance charges a small fee, (under $20 a month for a membership), but yields high returns as the minimum project is $50.00 and most are over $300.00.  Elance allots credits for bidding.(You can purchase additional credits if needed).There is no writer connection and no open forum, as in Helium.  However, there are jobs paying thousands of dollars available, making Elance a worthwhile freelance opportunity.

Now I open this up to you, the reader. Freelancing is just one piece of the home business pie. There are other ways to bake a second income cake. What opportunities have worked for you? I’d like to hear about your home business. What are reputable means to earn some cash?