You've watched the news. You've read the papers. Economic doom-and-gloom is everywhere.
Fear not, my faithful. I give you my theory: It Ain't All That Bad.
First things first: the Gross Domestic Product, the end-all-be-all measure dictating whether or not we are in the throes of a recession, continues to grow. Yes, it's growing slowly right now. That's expected, considering a 112 percent increase in foreclosures in the last year, inflation growing fairly rapidly thanks to rising gas prices, and job expansion slowing down. But the fact of the matter is that we are not in any type of recession, and simply cannot be in one — officially — until the GDP numbers are released for the second and third quarters of the year. By definition, a recession in this nation is when the GDP shrinks in two or more consecutive quarters. It grew by 0.6 percent in the first quarter, which means the soonest we could declare a recession is mid- to late-October.
Does that mean you shouldn't be concerned? Absolutely not. You should always pay close attention to your financial situation, and the situations around you. What it means is that It's Not Time to Panic. There's a lot you can do, now and for the rest of your life, to make sure you remain as unaffected as possible by any economic slowdown or recession.
- Develop your skills. If you can provide a company with a qualified skill, and you can do your job very well, you are likely to be retained. It's that simple. And it makes you far more marketable in the event you are one of the people who gets "downsized."
- Don't be too proud. People complain about the job market and sit unemployed for months or years, living on savings — or, unfortunately, landing on welfare. This can all be avoided if you simply let go of your pride. Work at a fast-food restaurant. Stock shelves in a grocery store. Get a paper route. Heck, do all three! The simple fact of the matter is that, even in the worst of economic times, there are countless jobs that go unfilled because people let their own pride get in the way. It is not, I repeat, NOT, beneath anyone to perform any of these jobs. And if you stop to think about this one simple, sickeningly basic truth, you'll see why: some income is better than no income. Yes, there may come a time when you have to rely on government assistance, and there is absolutely no shame in that. It's there for the intended purpose of helping those in need. But leaning on the government in the form of welfare or unemployment insurance while making little or no effort to resolve your situation is just plain lazy and greedy.
- Open a savings account. I can't stress this enough. Even if you can only afford $10 per paycheck, it's worth your while. Assuming two checks per month, that gives you a savings of $240 per year. If you get paid bi-weekly, that means $260 per year. After four years, you've saved about $1,000, and by doing what? Skipping a Big-Mac a week?
- Pack your lunch. Do you run to McDonald's or Wendy's every day for lunch? Do you know how far that six bucks could go if you saved it? Assume a packed lunch costs $2.00 for the ingredients (and, if you shop intelligently instead of conveniently, you can eat a hearty lunch for a dollar or less). The difference is $4.00 — per day. Assume, as well, two weeks for vacation each year and a week worth of holidays, which leaves 49 working weeks. That's $4.00 by five days a week, or $20. Multiplied out by 49, you can save yourself upwards of $980!
- If you smoke, STOP IT. Are you puffing through a pack per day? Cigarettes currently cost $3.50 per pack or more. Even at that low end of the spectrum, 365 packs of smokes will run you $1,277.50 per year. It's not an easy habit to quit. I know. But in the end, your lungs and wallet will thank you.
- Don't go out so much! Find something to do around the house — get some friends together and play poker or something. The average night out for two at the movies right now will run you at least $30. A poker game with a $10 buy-in saves you $20 right there. Three beers at a bar will run you $15, including tip. A six pack at the grocery store (well, here in the south we can get them almost anywhere) will cost about $7.50 on average.
- Combine your trips. We hear this one all the time, but it's making more and more sense as gas prices rise. Make time in the evenings to pick up groceries on your way home from work, or stop at three different stores on one trip during the weekend. Plan in advance what you need, and plan where you are going to get them. Then figure out your route in advance to cut the travel time and distance. Avoid high-traffic, low-speed roads. The less time you spend idling, the quicker you can get where you're going. And cruising at a steady 60mph on the highway or interstate in high gear will use less gas than the stop-and-go route through town, even if you cover a greater distance. You burn far more fuel getting to a certain speed than you do maintaining it.
- Spend the extra $1,000 for the more fuel-efficient car. You can take the sportier, 20 mpg car, or the more efficient 25 mpg model. Getting that extra 5 mpg will cost you $1,000 more up front (I pulled that number out of my rear, by the way, but this is an example). Assuming 15,000 miles driven per year, you would need to purchase 750 gallons of fuel at 20 mpg, for a cost of $2,250. At 25 mpg, it would require 600 gallons, for a total of $1,800 — an annual savings of $450. Considering interest, even at a low four percent, that $1,000 over a five-year period would actually cost you $1,216.65. Over that same five-year period, your savings on fuel would be $2,250 — a difference of about $1,000. You gain about $1,000 by spending more up front.
I could go on and on. And, over time, I think I will. That's why I'm creating yet another new category on the site called "The Good Life on the Cheap". But what I'm ultimately getting at is one of the central themes of this site lately: getting out of the Need-It-Now lifestyle is good for you in countless ways. You are only guaranteed three main things in this country outside of the protections in the Bill of Rights: Life, Liberty and the Pursuit of Happiness. You are not guaranteed the happiness, only the opportunity to pursue it. How you go about finding your happiness is up to you. And even in the worst of economic situations, you can find it if you figure out where to look.
