Recession Coping Strategies
Are you stressed about the recession?
I've been increasingly receiving e-mails from people having trouble dealing with the emotional trauma of losing a job or losing so much of their retirement savings.
I can help with the financial fallout -- giving you ways to trim your budget, etc. -- but to help with the emotional side, I've asked licensed psychologist Celeste Owens to join my live discussion today.
Coming Together During Tumultuous Times
Yet another result of the recession is more adult children moving back home to live with their parents.
According to the 2008 Census, 20 million Americans or 30 percent of people ages 18 to 34 live at home with their parents. And that figure will only rise as many college grads find themselves unable to find employment in this economy. Almost half of June 2008 college grads had planned to move home after graduation, according to a Monster.com survey.
Read more in Nancy Trejos's article "Back Home to Roost" (Apr. 26) about this boomerang trend.
Flushed, Flat Broke and Everything In Between
Some people who are still doing well during this recession, but are choosing to boost their savings rather than go on a spending spree, may begin feeling a little guilty now that some experts are suggesting it's their frugality that's keeping the economy down.
So last week for the Color of Money Question I asked: If you are doing well in this economy, why are you too scared to spend?
Here's what you said, and may I say, you said it well:
"Who says we're scared?" Heather Phillips of El Cajon, Calif., said. "That's just an assumption. Maybe we happen to be wise and never went in for the latest fads or most expensive car. The idea that we have to consume is ridiculous!"
I hope you know I'm not saying you're scared.
Anyway, Debi Turner of Walhalla, S.C., wrote: "The reason I'm doing ok is because I've saved enough to live on for a while since my husband was laid off and my seasonal job ended until next January. If I hadn't been prudent when we were both working, things would be a lot tougher now."
"What is flush if you don't know if you will continue to have a job?" asked Frances Roberts of Clinton, Md. "I know folks who have been unemployed now for over a year."
Cliff Perrin, who is currently touring Queensland, Australia, wrote, "I retired last year and have been spending ever since; but not dipping into my savings. I do not agree with the premise that saving is bad for the economy. On the contrary, saving is good -- in that it gives the banks the liquidity they need to lend to others to make the economy grow again."
"My advice is: go out and stimulate the economy and SHOP!" writes Margaret Morehead in Benton, Ark. "I made a lot of money during the boom and did not have time to spend it. Now that business has slowed down, and I have a little more time, I am shopping, updating my wardrobe and redecorating."
Don Cochran of Glen Carbon, Ill., wrote: "Seems to me the federal government is spending more than enough money for all of us. Our 401(k)s/IRAs have been destroyed and now you want us to spend like everything is fine? The common sense of Americans seems to be waking up again."
"I am unsure whether one would call me well off, but I am not in debt," says Jim Valone. "I am grateful for my father and mother who, being children of the Depression, encouraged us to buy only what we could pay for and minimize credit card spending," writes the Rochester, N.Y. local.
Michael Koller in Gaithersburg, Md., had this to say: "Let the wealthy who prospered handsomely under eight years of Bush's tax cuts be the ones to jump-start this economy."
"Doing well today does not mean doing well tomorrow," writes Kyle Murphy of Tokyo, Japan. "It may not help the economy in the short run but it should get us back to some good values in the long run¿now, the economist are upset because we are not spending enough? Give me a break!"
Mesquite, Nev., resident Lucy L. Williams says, "I can't help but remember that old definition of the difference between a recession and a depression, that means I'm the next to fall and I want a savings account to land on."
"I have made it a personal challenge to cut even more. It is my philosophy to live as far below my means as possible," Chad Balke of Winston-Salem, N.C. wrote.
"I'm not exactly 'flush,' but I thought that article was silly," Rita Reimer of Edgewater, Md., said. "Sure, these people may have secure jobs and good incomes; but they are watching their savings accounts, investments, retirement funds and children's college funds all tank."
Ella Roberson, who lives in Washington, D.C., sums it up best by saying "Because the job market is so unstable and with one child in college and another child jobless with a baby, I place priorities on family, which means I hold on to what's left for the unexpected. No new purchases, no vacations, and no unnecessary spending."
Home Cooking Fuels Life Lessons
I used to be one of those wives who thought it was submissive to cook a meal for her hubby. But, instead of thinking of myself, I started thinking about how preparing a home-cooled meal benefits my family.
If you've been reluctant or hate to cook, read the story I wrote for the Food section: If Big Mama Could See Me Now.
Color of Money Book Club
Have you been following the Bernard L. Madoff Ponzi story?
If not, and you would like to catch up, read the May selection for the Color of Money Book Club, "Catastrophe: The Story of Bernard L. Madoff, The Man Who Swindled the World."
Authors Gerald and Deborah Strober write an interesting account of the man who swindled the rich and famous and the small investors. Check out the column I wrote about their book, too. Then join me at May 21 at Noon ET for a live Web chat with the book authors.
This story is not going away any time soon. Just this week, Madoff's longtime secretary said she believes Madoff is not cooperating with the authorities in order to protect others.
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Charity Brown contributed to this e-letter.