So...recession. That's bad, right?
September 15, 2008 5:02 AM Subscribe
I get that the economy is bad in general. But I'm trying to figure out how this is all going to affect me specifically.
posted by EmpressCallipygos to Work & Money (11 answers total) 3 users marked this as a favorite
Because of some misfortune 6 years ago (my income completely TANKED in 2002, and I had to take a few cash advances on my credit card to make expenses), I have been operating under total tunnel vision economically since then, ignoring what was happening in the rest of the world and trying to get my own house in order. Now that I think I've just managed to do that, finally, comes the news of Bear Stearns and Lehman and Fannie Mae and Freddie Mac. I also am not too well educated on how the economy works on a detailed level; I do know generally the positive and negative trends, I just don't know how to translate them into a practical hands-on, how-does-this-affect-me kind of reality. So can someone explain how someone in my case could potentially be affected by this?
* I rent, and I have no intention of even THINKING about buying anything until my credit card bills are knocked down, and that won't be for another 3 years. I also went for the 2-year lease when it renewed, so my rent will stay the same until 2010.
* I somehow kept up all my bills even when things were bad, and as a result I have AMAZINGLY good credit.
* I just applied for and received a super-low-rate credit card -- and my research confirms that the rate will actually not ever rise -- which I am using solely to transfer a balance from a higher-rate card. I rarely if ever use my credit cards for actual purchasing, I'm just paying down balances. I pay a little more than the minimum each month.
* I have a modest IRA and a modest 401-K plan. I have no intention whatsoever of touching either one for at least 36 years.
I also have a very, very modest savings plan -- a bit put in each month, but after a year that becomes my IRA contribution.
* I have pretty conservative spending habits, and they just got even more conservative when I started brown-bagging my lunch at work (but that was for health reasons; I'm taking the financial savings as a fringe benefit). I rarely eat out, I see maybe one movie a month in theaters IF that, I take a DIY approach to a lot of things.
* I usually get a decent couple-hunderd refund on my taxes each year; I haven't owed anything on my tax returns since about 2005.
* I don't own a car and rarely drive. As for home heating - those costs in this apartment are generally pretty low (got into the "leave the thermostat turned down and put on a sweater" habit early). So the oil costs aren't affecting me too much either. (Yes, I do know how gas figures into the cost of products coming to stores, though.)
I've tried asking a friend about this kind of thing before, and pretty much all he said that I would go through is that my taxes would go up a little and prices of things would also go up. Which doesn't sound that bad, actually (I'm used to living frugally as it is already). Can anyone else give insight into how else the economy might affect me specifically?