[Z-man]

Originally Posted by Porsche-O-Phile

People are still living way beyond their means

This is the keystone / hitchpin to our current economic crisis -- people don't understand how to manage their finances because they simply don't care. People need to learn to be wise with their finances.

In terms of finances, I am not perfect, but lately, I have really focused on not over-spending. As posted here before, we are re-doing our kitchen and house this summer. It is a huge renovation that will run above $50k. But we have been planning on doing this project for a couple of years, so we have been saving and limiting our spending. Because of being mindful of our finances and the upcoming kitchen project, we were able to plan out a decend middle-of-the-range kitchen with a couple of more expensive upgrades like a farmhouse sink, matching panels on the fridge and dishwasher, and an instant hot / cold filtered water dispenser.

And at this point, it looks like we won't need to take on a home equity loan for this project. The appliances were bought on a new credit card that has 0% interest for the first year, and the ~$5000.00 spent on appliances will be easily paid off within that year. So except for that $5k, the rest of the kitchen will be paid off upon its completion.

I am very proud of the fact that in the current economic downturn, I am able to pull off such a project by managing our finances instead of just taking out a loan and paying it off for the next 10 years. Mrs. Z-man and I earn a decent income, but we're not rich -- we're firmly middle class. But it doesn't take a huge salary to learn to manage finances -- everyone needs to learn to NOT live beyond their means.

So this means that I won't be taking my 944 to the track this summer. And we probably won't be taking a vacation either. And Mrs. Z-man, who is a teacher will have to take on a part time job this summer (first time since she's been teaching). But these short term sacrifices will enable us to not be burdened by a huge amount of debt. And by the fall, we'll be able to return to our normal spending habits. That's a small price to pay for financial soundess, IMHO.

We'll eventually recover but it's going to be a long, hard, miserable slog.

I adhere to that thinking as well -- everyone was hoping for a "V" shaped recession - where a quick downturn is followed by a quick upturn. I think we're in a "U" shaped recession, where we wil be at the bottom of the "U" for some time. (Hopefully, it's not an "L" shaped recession where the upturn is not even on the horizon!)

But there have been some leading economic indicators showing a slight upturn. The car industry is a little bit better than last year, but not as good as prior to the RE collapse a couple of years ago. But car sales are up, and there is no artifical 'bailout' or 'cash for clunkers' program driving the numbers. Folks are buying new cars again. Not sure how the retail industry is going -- there are a lot of cars in parking lots (Kohl's especially in my area) -- but are those people just browsing or shopping? Are the cars in those lots since some stores have closed and those lots are simply filled with cars that would typically be at the other stores' now empty lots?

2014-2015 at best for any sort of a "real" recovery - and that's assuming we get rid of the current bunch of idiot "leaders" we have and start repealing a lot of the big-dollar drag items (i.e. entitlement spending, like ObamaCare) they've created or promulgated.

I think the recovery will be harder to guage. I think the recovery will be dependant upon how individuals change their spending habits and go back to old school thinking abut finances: live within your means, save for a rainy day, and invest wisely. <-- a more conservative approach than what's been going on for the past couple of decades...

Just my $0.42,
-Z-man.