Economic life in the US will be different from what we've known
Submitted by LJM on June 12, 2008 - 4:16pm.
CPI | food | oil | prices of everything else | Economy | economy
It's pretty clear from reading this article that the prices we once knew as reasonable just aren't going to return. The price of oil and corn are going to remain higher due to global demand. Those two commodities impact the price of other foods we eat and products we use. It's time for all of us to put on our thinking caps to determine how we move forward from here to try and manage to have a reasonable life. The CPI hasn't been impacted much, because food and energy haven't been counted in that equation. The price of everything else will be impacted in the future. We just have to see how it all plays out in the end.
I know we've talked before about growing our own food and ways to do it. We've discussed ways to conserve on gas and the value of recycling. What other ideas do we have to make an economy we can live with during the time of a falling dollar? I'm very big on buying good used items rather than buying new. Because of e-bay, I'm good on shoes for probably 10 years or more. Anybody have other ideas? As the job market is impacted further, people need to analyze all their skills to see what they can do to get by. I've seen more young women working in the landscaping business in my neighborhood. People who can do handyman things should be able to create a small business for themselves. My sister is growing extra food in her garden to have extra to sell this season. She also can can. In my case, I planned for this time years ago. My elderly parents moved in with me as has my retired oldest brother. We aren't maintaining 3 separate households and all have pension incomes. We've made sure to have zero debt and in the case of my brother, his debt is at a low fixed interest. Credit cards do too much damage to carry a balance over from month to month. We stopped eating out so often and invite friends over for dinner as our form of entertainment or for a NetFlix movie. We all use the library and go for walks in the neighborhood.
We're in it for the long haul, so anybody have good ideas for ways to live in our declining empire? No matter what we do, we need to be mindful to help people who are having a very difficult time. Food banks in the US always need more food and worldwide people do too. They need money. Sadly, the dollar doesn't buy as much as it once did.
Sell, move to Arkansas, and retire on the difference in housing costs and taxes. Little Rock is a nice place, except in July and August.
Stan Davis
Lakewood, CO
Wes Clark -- Make America All It Can Be!
Especially the trolly! We have a ways to go before retiring and have to work for healthcare. Speaking of health, are you all healed up? I remember you had a bad fall.
I don't know who left when. 2007 wasn't a banner year. Broke each leg two months apart, in March and May. Second one wasn't much of a big deal. Wasn't even treated, really. The first one took six weeks, 9 days in the hospital and another 37 days in rehab. Was back home in late April when two weeks later broke the other leg.
Was doing great, but my knees are still tender and tight. But they don't keep me from doing much except all that jogging I used to do (NOT!) and running up and down stairs. Later, I was diagnosed with severe osteoporosis, so I take some very expensive stuff for that. (Retail $880/month, my cost $75/month.)
Thanks for asking. I have no complaints. Am very content except for the political scene.
Stan Davis
Lakewood, CO
Wes Clark -- Make America All It Can Be!
Stay away from acting in the theater!
I didn't know about the second. That's rough. Osteoporosis was a factor in the breaks?
My doc has me on a hormone patch which I was told would help in avoiding that condition. I'm skeptical of pharma but what do I know. One year hormone replacement good.....next year bad. I researched before deciding but the pro and con was seemed even. Doc is a leader in her field at Northwestern in Chicago and she is adamant that it helps with the effects of aging, so I'm gonna slap that patch on(10 to 15 yrs!) until she says otherwise.
I pay $30 a month so it's manageable.
We have a lot of joggers here in Naperville. I never could see the appeal. Yoga is more my speed!
Take care, Stan:)
Actually, all is manageable. You probably know the story, but my root condition is hemochromatosis -- a genetic blood disorder in which my body doesn't metabolize iron. It just builds up. Before I was diagnosed, my blood had become sludgy, and caused diabetes and my 1999 stroke. Add my bad habits and my body is pretty much a wreck, but at least my brain is intact, except for the hole caused by the stroke.
The word I use for myself these days is content. I know I would do everything I did again under the same circumstances. I've lived, loved, been loved, lost, and laughed.
Stan Davis
Lakewood, CO
Wes Clark -- Make America All It Can Be!
Hell, you're partially bionic, I think ;-)
"Our public servants work for us - we don't work for them. We have an obligation, as citizens of this country, to always remember that - and to never let them forget it." - DeadMessengers
you and my 80-something aunt. She really is half bionic, lol. wires, valves, pacemakers, joints...
"Our public servants work for us - we don't work for them. We have an obligation, as citizens of this country, to always remember that - and to never let them forget it." - DeadMessengers
If you're really asking for advice, then I'd say you have to look seriously at selling. That your home has held its value is pretty amazing. But, the credit crtunch is only a part of the housing woes, remember. This is also an enormous, and necessary, market correction in housing - so it's not likely to improve back to pre-crisis levels. My guess is, it will almost certainly get worse before it levels out.
It's no longer just whether or not one can afford to buy a house, but increasingly, as the mania of home ownership at all costs wears off, whether one is willing to pay exhorbitant costs (relative to the cost to build it)for a house. There are an increasing number of buyers who simply are no longer willing to pay $300-$400k for a house that cost $100k to build incl land, as an example. (wish they were actually that cheap in California!)
As for where to look - you're the only one who can answer that. (But I'm very fond of LR too). My parents lucked out and sold their house in California about a year before the crunch began, and moved to Oregon. Best thing they ever did. They'll be financially free for the rest of their lives because of it.
Wish yo the best of luck - it's a tremendously difficult decision, I know.
"Our public servants work for us - we don't work for them. We have an obligation, as citizens of this country, to always remember that - and to never let them forget it." - DeadMessengers
I always think downsizing and having as little debt as possible is the way to go. You not only have the cost in gas to consider, but the cost to heat and cool a home that's larger than you need in addition to the taxes. I guess you have to take a good look at your lives (you and your husband). So long as you have jobs you need to get to, living closer to work could be the priority. I have friends who have purchased small condos to live close to work and finish out their working years. When I say small, I'm talking studio apartment size small. Then there's always the idea of renting, which isn't a bad idea in these uncertain housing times. You may want to sell the house if you can and rent an apartment close to work. Then at some point, when jobs aren't the big destination in your lives, move to the more rural location. It's just an idea, but one plenty of people are going with right now. The other thing about property taxes, they are deductible, so depending on your tax situation, it's another consideration.
"The CPI hasn't been impacted much, because food and energy haven't been counted in that equation. "
I heard a segment on NPR radio about the "cost of living" index. The reason that food and fuel prices aren't included in the index is because the numbers are so variable. Now that there appears to be permanent changes to these costs, changes are being considered. Supposedly the Fed reserve board is using an unofficial variation now that does take these into consideration.
Then they were removed, which makes it easier for economists and pols, but not for people. Herbert has a great op-ed on how difficult these times are for so many people. The cost of fuel and food rules their lives and they aren't able to keep their heads above water no matter how many jobs they have.
My youngest has graduated from high school last month. We live in a great school district but along with that we have high taxes. We had always planned to move to lower property tax area when the last goes off to college. We have done a lot of work to the house to be prepared. (competitive upgrades). But since the downturn in the economy and the unstable housing market we have gotten to nervous to pull the handle.
Our market value has held because of the school dist. so maybe we should sell before it changes for the worse. We had planned on moving a bit further away from the metro area to save on taxes but now there are fuel cost concerns. The town we live in now has public transportation and a metro line into Chicago. So maybe we should give up the dream of owning more property a bit further out and stay.....but what if we wait and property values decline? I go back and forth, back and forth. We could really decrease our current mortgage payment by scaling down to a smaller house and easing the tax burden. How important will it be to live by a metro line though? Stores and entertainment within a short distance?
I've worked two jobs for the last seven years to pay of all debt. We reached that goal about ten months ago. I scaled back to one job (thank goodness). Last month the company my husband works for was purchased by a large Indian company. We are now uncertain if they will restructure. So if he does get laid off and has to find another job wouldn't it be better if we did sell and downsize....or should we wait. I'm going crazy!