My economic forecast

[yesthattom]

1. Don't panic. However, expect this to last 3-4 years. This is the primar point. People are saying it may last 1 year. No, it will last 3-4 years.
2. Quietly start to conserve cash. Money you spend now is more "expensive" than money you have a few years from now.
3. Stick with a stable crappy job. Find a way to make it work. (If your job is not stable, seek one that is or position yourself within the company somewhere that they will always need you.)
4. If you own a house, don't sell it. If you need a house, this is a good time to buy. (Don't sell one house to buy another; that's going to screw you.)

If you are super rich, this is the time to start a new company because labor is cheap and by the time you get it up and running the recession will be over and people will be ready to buy. However, I doubt this applies to many of us.

Comments

Re: Your thoughts? (just curious)

[barking-iguana.livejournal.com]

For Reasons 0 and 1 to apply, you've got to not yet have enough of a cushion to make you feel comfortable and the credit line is (or might) go away as you pay off the debt. The second condition is usually true, I guess, but the first might not be.

If you view debt as negative savings, then paying off debt is savings, habit and all. So I don't see Reason 2.

I can't argue with Reason 3, except I doubt the benefit outweighs the difference in interest rates between potential savings and extant debt for most people.

Re: Your thoughts? (just curious)

[awfief.livejournal.com]

We're still saving because while 6 months of living expenses are great, we are saving to buy a house. It doesn't *feel* like saving if all we're doing is paying off debt, and our savings are stagnant. Even though we *know* that's not the case, mental!=emotional.

(for example, 1/2 our 6 months' living expenses is sitting in our regular checking account, because Tony feels better seeing the cushion. I would be happy having it all in our ING account, where the other half is, but it doesn't matter to me where it is. So we take the few percent interest hit on a few thousand dollars so that Tony feels better about things).

If it were all about mental stuff and $$, anyone in the SF Bay area and greater Boston area and NYC area would move somewhere tons cheaper and save gobs on rent if/when they got laid off. I know tons of folks in the Boston area who are paying 1/3-1/2 their take-home pay in rent.