Folks on the edge pinched by rising prices

http://www.sacbee.com/finance/story/785026.html

This article struck me for many reasons.

Firstly, it was a great "whoa is us" about the following:

*Less driving
*No new clothes
*POSTPONING remodels
*Dumping gas guzzlers
*Less dining out
*More walking
*Budget EVERYTHING
*Less cable

Oh, the Humanity!!!!!!!



I know, another one of those...

Of course, this was a lot better than the last article I saw like this. I mean, this time they talked about the seniors on fixed income and the increasing unemployment in the region. You know, the real problems. So that part I "get" somewhat, and I See that there is pain.

But I can't help but think about all the people who were over indulging with money they didn't really have or couldn't expect to hold up (home equity and inflated paychecks with the strong housing industry, etc.)

Whereas when I read the list of what everyone is giving up in this great time of pain, I think, "You have got to be kidding me." These are things we have always been conscious about, our entire adult lives, whether we were living on $10k or $100k. IT doesn't sound like THAT MUCH To give up. !?!

Likewise, we haven't really been feeling much pinch personally. & I wanted to share why.

For one, we try to avoid over-splurging on luxuries as we build up our savings, pay our debts, and build our careers, etc. I mean, trust me, I think we have plenty of luxury. But there is no way we could afford most of the things on that list above, all at once, together. & beyond that the only thing I saw on the list above that we truly have in excess is cable. Most of our luxuries follow what make us happy not what the JOneses expect of us. Which makes it quite easier to do without the rest.

Two, well yeah, we do budget EVERYTHING to extent. I mean how do you just budget some things and not others? LOL. (Sorry, that line cracked me up. Now we have to budget EVERYTHING!!!)

Three, the secret here is that our budget includes future planning. I am not guaranteed a raise every year, nor do I have a crystal ball about how much our expenses will change year to year. I have been burned bad on medical expenses, and so try to keep that front of mind.

I budget around $100/month more for groceries than we generally use, and same for gas. This is precisely why. So when things start to get ugly, we don't notice a thing. Maybe a little less to savings or splurging when the prices do rise, (what I do with the underages), but the basics are WELL covered.

Four... Along the same lines. We have quite a fair amount of fat we could trim from our budget, with little pain, if prices were to keep rising astronically and/or my pay went down. I mean, sure, no one wants to give up their luxuries. But I think knowing I Could pay all my bills and cover the basics, and even have a little to spare. I think in hard times I could give up the luxury quite easily, in order for that feeling of security and comfort.

Frankly, I wish I was more prepared for a long layoff and such. I Feel pretty confident where I am at, but I am one who likes to prepare for the worst. So I am working on it. Certainly not prepared for the worst. OF course, not sure if we ever will be.

But overall, I think we are in a good spot.

I guess the simplest is we never got used to living beyond our means in the first place. & that we have a little wiggle room and flexibility in our budget. That really makes ALL the difference.

I mean, in this region, the norm in the coming years is going to be figuring out how to survive on wages, and unemployment, when used to living extravagantly off equity and fleeting bonuses. All the while, while prices of the basics are rising. YEah, that is going to hurt. Ouch!!

That almost sounds like my world the last 5 years while our income was slashed in half and our medical insurance skyrocketed our of control. Now we are gaining traction and I am not sure I identify with all the mess... You know, our gas and groceries up $50/month or something. But somehow we'll muddle through... HArdly feels like something worth panicking about anyway.