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Brittany asks:
I'd be interested in an update to the "How are you adjusting to the economic crisis?" post now that we're 3 years in. I'm interested to see how many habits have "stuck," how many new tactics have been developed, and who's reached a new equilibrium that's swung closer or farther away from the "pre-recession" days.
I'm grateful that Brittany asked this, because this is exactly the type of crowdsourcing question that can unlock extremely useful ideas and advice from the insightful audience here at Casual Kitchen. Before I hand it over to you, dear readers, I'll share some quick context on what we're doing here at CK.
The bottom line for us is we've kept nearly all of the expense-reduction habits we took on back in 2008. We eat out far less often--in fact, I can't even remember the last time we went out to an expensive restaurant. With the (uh, enormous) exception of our townhouse that we bought at the very end of 2009, we've made very few big-ticket purchases, and any home improvement projects we've done have been modest and done over time. We haven't bought any cars and--knock on wood--really hope we won't have to for a long while.
We're always keeping our eyes peeled for ways to manage our fixed expenses downward, another habit that I'm thinking we'll maintain. This year for example, we made adjustments to our auto and health insurance coverage to get our premiums lower, and we're seriously thinking about taking a break from cable TV in 2012--after ditching cable in 2008 and actually enjoying the experience.
For us, our expense reduction habits have "stuck." Hey, it's possible that we might be in a mediocre economic environment for a while, and this a big part of why we're keeping our proverbial belts tightened.
Readers, now it's your turn! What are you doing now regarding your spending--and how does it compare to 2008 when the recession started? Which habits have you kept and which have you discarded? Finally, have you discovered any new savings tactics you'd like to share?
Share your thoughts in the comments!
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5 comments:
As the in-laws now own a log cabin in the forest, I will be investing in some hunting training and equipment.
Being able to supply your own local, organic, free-range meat while also enjoying the great outdoors sounds good to me :)
Living where we do, our two biggest expenses are transportation and rent. I stayed in a bad job for about four years too long because I was able to walk to it, but in late 2007 bought (for cash) an old car because I knew I had to leave that job.
2008 was a retrenchment period. DH and I renegotiated our financial management. He paid the rent and made his own debt payments; I paid for insurance and food and put almost everything else into paying down "my" and "our" debt.
We stopped eating out, we maintained our policy of "drive-to" vacations, I shopped at mass market grocers instead of Bristol Farms, we didn't upgrade much of anything (and we are notorious serial upgraders).
In 2010 - after getting laid off from the voluntary downsizement and then getting a less secure job - we didn't take a vacation at all.
Things are looking way, way up right now ... but we are now so used to not eating out that we have gotten a little hard to please. I can make a steak just as good as the ones at Ruth's Chris, and we can share a $12 bottle of wine instead of paying $12 each for a glass.
I am still driving my old car and DH is still driving HIS old car. My debt and "our" debt is paid off, we have an emergency fund, the 401(k) is chugging sluggishly along, and next year we plan to retire "his" debt.
What we found by renegotiating so that we were essentially living on one person's earnings, is that by simplifying the financial management we made it possible for real progress to be made. And now either one of us could pay all the bills if we needed to.
So oddly enough, even though our average annual income was way down in 2008-2009-2010 from its 2007 level, we saved more (because I count repaying debt as saving - it's the best investment we could have made). And now we have the habit of saving, which means the next 5-10 years are going to be much, much more pleasant.
Stuart: I love it! In just a few weeks hunting season starts up in New York State where my parents live--I'm hoping my father and brother-in-law have a lot of success this year!
Chacha1: Thanks for one of the best and most thorough comments I've seen in a long time here at CK. You've shared some serious, heavy-duty advice here, and I'm really happy for what you've accomplished. Thank you.
DK
We too have kept pretty much all the money saving habits we started. I've been using coupons on a limited basis, which has helped a ton even without much investment of time. We go out to eat much less, and we eat mostly cheap meals at home (beans, eggs, cheap cuts of meat, etc). We only have one car and try to minimize its use. And now we're looking to go further, because I may have a reduction in income. In hindsight, the thing weighing us down is our house. We bought just as the market was turning and got a good deal, but of course things kept slipping farther. If we had a cheaper house we would be doing much better, but not much chance of us selling it now without losing. We're not in terrible shape compared to many people, but I do wish we had bought a bit more wisely. So I am working even harder to cut back on the food budget, and we're looking at what other expenses we can reasonably cut out. I think we will keep most of these habits for the rest of our lives, though I do look forward to a point when I'm not counting pennies so fastidiously at the supermarket or when I can buy my son a Christmas gift. (Don't feel too sorry for him--he's only 2 and he gets more than enough gifts from his grandparents, so we decided to save money on the Christmas and bday gifts until he is old enough to really pay attention. But still, makes me sad that I can't splurge a little on him.)
Jen, thanks for an excellent comment.
If I might add, in the past year or two I've been doing more financial consulting and savings/investing consulting for "regular" people--mostly friends and acquaintances--and in many cases, people are facing exactly what you're facing: one or two large, high-fixed cost, big-ticket expenditures that disproportionately weigh them down. In most cases it's a house.
It's that old 80/20 Rule again, and it's a tough one to solve, but the solution I think is exactly what you're doing: look for where else in your life you can reasonably cut out expenses to make up the difference. Thanks for sharing.
DK
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