Is a recession coming? What about a personal recession?
About six months before the pandemic, I started a post draft titled, "Is a recession coming?", and I never finished the post.
It's kind of funny to look back, because yes, we did have sort of a recession during the pandemic.
Then there was an economic resurgence, but now I keep seeing, "A recession might be on the way!" types of headlines.
I think there's some value in paying attention to these things, largely so that you can be prepared. But honestly, I think it might be better to always be prepared for economic difficulties.
This is wise partly because no one really truly knows when a recession is coming until it's practically here. And at that point, it's a little late to start prepping!
The other reason, though, is this:
Regardless of what's happening in the economy at large, it's always possible that a "personal recession" might hit you.
(I think I first heard this term on the How to Money podcast, although I don't know who originally coined the phrase.)
A personal recession is basically a period of hard financial times for you, not necessarily for the larger economy.
Things that come to mind are:
- job loss
- illness
- divorce
- an injury that prevents work for a period of time
- a series of big expenses
- anything that keeps you from working (or makes you work fewer hours)
Because these sorts of difficulties are always a possibility, even in a booming economy, I think it makes sense to always be prepared to weather a recession, whether it's personal or not.
So, here are three basic things that you can do to prepare for a personal recession. If you're already doing 'em, great! If not, now is always a good time to start.
1. Spend less than you earn
Spending less than you earn means that your monetary surplus can consistently grow.
A personal recession hurts no matter what, but it's a lot less painful if you aren't already living in a near-disastrous financial state.
Monetary cushioning = more peace.
There are a million ways to spend less than you earn (I've been writing about that for years now), but one key thing is to set yourself up for sustainable, repeated success.
Basically, you should look for things that offer repeated savings over time.
For instance, you could find a good price on paper towels, but if you switch to t-shirt rags, dishcloths, and kitchen towels, you'll save way more over time.
You could work the deals and get some tampons at a serious discount, but if you switch to a menstrual cup, you'll enjoy the savings every month for years.
The same goes for switching car insurance, switching to a low-cost cell phone plan (we love Mint Mobile SO MUCH), choosing a reliable car that takes regular gas, and so on.
One-off savings are good; repeated savings are better!
2. Get good at living well on a low budget
If you've been living large and then a personal recession hits, the adjustment to a low-budget life will be rather painful.
But if you have already honed your living-on-a-small-budget skills, you will be less stressed when a personal recession hits you.
I've felt the relief of this in my current circumstances; I'm kind of in the midst of a personal recession and I don't really see that changing in the super near future. Heck, it may actually get worse before it gets better.
But I don't feel terribly stressed about it; I already know how to make a beautiful life on a shoestring budget, so I think I'm going to be fine.
3. Earn more money
I'm a huge fan of money-saving activities, of course! But I am also a fan of earning money.
If you do not already have a financial cushion and you want to get prepped for a personal recession, frugal habits can help some.
However, upping your earnings can really speed up your personal recession prep!
If you have a job already, you could ask for a raise. Or you could switch employers.
But there are other smaller moves you can make too, depending on your skill sets.
In my adult life, my side hustles have included babysitting, freelance writing, and photography, and I've played the piano for weddings, funerals, parties, and churches.
And though it's never come to this, I know I could hire myself out to help people declutter/organize.
What are you good at? There's probably something you could do on the side!
My friend Whitney flips furniture as a side hustle.
Some people who live in big cities make a side income charging electric scooters.
Some people pet-sit or house-sit.
Some people tutor on the side.
There are tons of possibilities!
Obviously, you don't want to side-hustle yourself to death; it's important to keep a balance between working and living.
But if you are in a precarious financial spot, it could be wise to buckle down for a bit and do some extra work to get yourself into a solid financial position.
But what if there's no recession?
It's possible that you could do this prep work and then never experience a personal recession (or a countrywide or worldwide recession).
But the odds of that are extremely low; most people hit financial bumps at some point.
And besides, if you do this prep and then never need to use your cushion, I think that's a best-case scenario; better to have it and not need it than to need it and not have it.
___________________
Usually, I ask a single question at the end of a post, but I've got multiples today!
We have been extremely fortunate that we have not suffered from personal or other recessions.
The additional benefit of Spending Less Than You Earn is that it takes less money to fund that lifestyle so if "disaster" hits you are better able to weather the storm by both having a financial cushion and not needing as much money.
I have a niece that is in her early thirties and she and her fiance earn their living and housing by pet sitting. They travel all over the west coast to stay with pets in their homes. I would find that extreme but it works for them.
@K D,
I replied too quickly. It has been many years since we have had a major financial struggle so they were not at the forefront of my mind. My husband was a poor starving graduate student for many years and then a post doc still not making much money before I met him. He also had to start working at fourteen to cover all his expenses and also contribute to the household. He dropped out of college when he was freezing and couldn't afford warm shoes in the wintertime.
After we were married we lived paycheck to paycheck for a few years, though there were splurges that, in retrospect, were unnecessary. We also have lived below our means for a very long time which has allowed us to build a cushion. Again, I know how fortunate that is.
Thinking about this, it occurs to me that I have never in my life had a "side hustle." (My husband, on the other hand, has had many.) EXCEPT . . . I feel like the way we manage our life IS a side hustle. What I mean by that is that no one pays me to grow a garden, preserve foods given to me by neighbors, raise animals, cook everything from scratch, butcher game animals, etc. No one pays my husband to build chicken coops, do all the household repairs, go hunting, set up water catchment options, etc. But those things contribute as much to the overall financial health of our household as selling thrifted clothes or whatever.
Time is money, as they say. And having time to do these things saves us money. And, more importantly, makes us much more self-sufficient.
We were in a "personal recession" for years when my husband started his own law practice just as our first child was born. Years of uncertain income and a growing family. It was stressful, but we figured it out. It's better now, but if we have a reverse of fortune, I know we'll figure it out again. Owning our home is a big one for my personal peace of mind. If I know I have somewhere to live--especially somewhere that allows me to produce food--everything else is manageable.
@kristin @ going country, very well said.
@kristin @ going country,
I have always admired how hard you work to make the life you want possible. I know it is not easy to do all that you do. I stayed home for several years when I was at childbearing age. I had 3 children in 5 1/2 years. Nothing would upset me more than when someone would look down their nose at me and say, “oh you don’t work.” I have never worked as hard as I did in those first seven years of their lives.
@Bee, I agree with you! I have never worked as hard as a Charge Nurse as I did raising 5 children! The shift never ends when raising kids but them having an available loving parent is priceless!
Sarah
@Bee, I totally agree! The "oh you stay home. You must be rich" statements used to drive me up the wall.
@Auntiali,
Yes people don’t see the financial sacrifices we make to be able to stay home with our babies.
About personal recession, in the last year we incurred some huge medical bills from unexpected hospitalization, pregnancy and delivery, and an ER visit for one of our children. Thankfully we had an emergency medical fund and money set aside to pay off our super high deductible. The difference went onto a payment plan. Despite just having a baby I still planted a garden which I think really saved us money this year. Cooking from scratch, shopping Facebook marketplace first, making lunches for school and work, baking bread (my aunt gifted me with a bread maker), are just some examples of things I do to lower some expenses. Once the baby is a little older I hope to find a work from home job in the nursing/medical field.
I have never actually had a side hustle. But my regular job pays very well and is very utilitarian (nursing). But we do live a debt free lifestyle and I cook almost all our meals at home, we drive old cars, have a reasonable mortgage, etc. That being said I graduated from nursing school in 2008, and in 2009 and 2010 weathered a recession. My employer did two separate rounds of layoffs and I watched good nurses and good employees get laid off. This affected my whole outlook going forward and made me realize how your whole financial life can be turned upside down overnight. It made me always spend less than we made, and stay out of debt and have a fat emergency fund so that if that ever happened to us we would be ready.
Oof, am I feeling this between purchasing our first house, gas prices, grocery prices, my husband’s recent ER visit, one of the cats having a UTI (and associated vet and cleaning costs), missing work thanks to COVID, and having *just* had to order a new work shorts for my husband because a pair tore irreparably in this morning’s laundry. I keep having to remind myself that we still have savings (that we do our best to pretend isn’t there); we’ve plenty of food in the house for us and the cats; and I always have the opportunity for more hours at my part-time job if need be. I’m very protective of my time, but I’d rather work more hours than dip into savings!
My side hustles include freelance writing, ghostwriting, and rentals. Before, I rented via Airbnb/VRBO, but now I'm trying (sigh) to rent out year round as it's less stress and work. In theory, anyway.
I was well off for a long time and after my ex left, I became a struggling single mother. Which I still am, my kids have had many serious issues and we've weathered the storms by my working a lot, taking out a mortgage on my previously mortgage free house, raiding my retirement funds, selling valuables, borrowing from my mother when desperate (always paid her back, etc). "Spend less than you make" sounds good to me but I've never been able to do it. In fact just the words make me depressed.
On the other hand, we're all OK, the kids are educated, the pets are vaccinated and we're all sane-ish. Except for the rescue coonhound--she's a little messed in the brain.
@Rose, how did you get into ghostwriting?
Do you have your own blog about it? If not, is there any chance of a guest post on that?
@Danielle Zecher, I don't have my own personal blog, no. I probably should but I don't.
When I was downsized from my previous writing/editing job in 2019, a neighbor came by to chat and I ended up saying something like, "And if you hear of anyone who needs a fabulous writer, mention my name!" He thought about it and then decided he wanted me to write his memoirs for him as a graduation gift for his daughter. Which I did (and charged him out the wazoo, he's a hedge funder). Now I am a member of a NYC agency of ghostwriters, and when someone contacts them wanting a writer, we can all apply with relevant credentials.
I have another full time writing/editing job now, so it's hard to juggle everything, but there are plenty of jobs out there for ghosts. Most people haven't the foggiest idea how to write a book, but I do. You can also ghostwrite blogs, corp communications, speeches, and so on.
It would probably be hard to get book ghosting jobs without having written books before, so start out smaller, I would guess. I've written several books now under my real name and several ghosted.
and my issue is as I alluded to below. I overwork, I have bad health, so I treat myself and then I need to work more. Or I have a rotten day and get takeout for everyone. Or I feel too crummy and pay the cleaning lady. I need to get off the hedonic treadmill. Once my kids are finally gone for good (oh please soon) things will ease up. They cost too much.
*New Scientist did have a very interesting article about long Covid and CFS, both of which I have, as a clotting disorder.
@Rose, thanks for the information!
In farming, or at least in our brand of small conventional farming, it seems like a personal recession is every time we turn around. If it's not commodities prices, it's repairs; if it's not repairs, it's fuel cost; if it's not fuel cost, it's some factor driving up land rent; and on and on and on.
Once you get used to knowing that, it's manageable. Not fun, but manageable. We pretty much only spend when we have to and very rarely spend for entertainment. We eat well, drive reliably, provide for our kids, and have the opportunity to do some monetary giving, almost no matter what personal recession looms over us at the moment. So it's fine.
As kristin @ going country said it so well, I actually feel like my job plus a decades-long commitment to frugal living are my side hustles. My income is one-fifth of my husband's, but it has made the difference between having wiggle room and not in our financial picture. My goal in life is to retire and never have a side hustle! I have served my time.
When I was a stay-at-home mom, looking after our son and then being caregiver to my mother, who was ill for years, frugality made that lifestyle possible. We did not live lavishly and I worked very hard at home. I work less hard at home due to being older now, but much of the daily frugality still goes on.
My husband and I had a couple of very odd conversations with a new financial advisor who is more used to counseling rich folks in Texas who own private planes and have second homes on lakes. We finally had to get really blunt with him that we have always lived really frugally and did not intend to work until we died to support his idea of what our lifestyle should be. Or as my husband put it to him, "You make my wife nervous. She doesn't spend money." 😀
@Ruby, “you make my wife nervous she doesn’t spent money.” That is such a great line.
It reminds me of the time one of those door to door salesmen was trying to sell me really expensive individually packaged meat. And he wouldn’t listen to me about how I have four kids and don’t need individually packaged meat and how his prices were way higher than if I just bought the me family pack and packaged my own. He actually got the meat packages out of his van to show me these boxes of meat just as my husband got home. And then tried to buddy buddy up with my husband to tell him how his wife wasn’t going to buy him nice meats. My husband basically told him that I was the best cook around and he didn’t think my cooking would improve by buying any of these meats. The man finally got the message.
But he came back a few weeks later and that time our giant black snake that lives in our garden decided to crawl across the porch behind the man. The kids were all so excited to see it. They were calling each other, “the black snake is here!!” And rushed to the windows and doors to watch it crawl around. I think it freaked the man out so much that he never came back after that.
@Faith, your meat hustler reminds me of the time DH and I were in the Miami area visiting relatives there, and we pulled up at a red light next to a guy who rolled down his window and yelled, "Hey, I've got some nice beef in the back of the truck! Wanna buy some?" DH (who, bless him, was rarely at a loss for words) replied, "Sorry, I'm a vegetarian!" Which he was, for the remaining seconds it took for the light to change.
@A. Marie, we used to get meat hustlers all the time and became instant vegetarians the second the truck pulled up in our driveway. What was funny was that he must have heard that all day long, as we lived in an area that actually had a lot of people who were real vegetarians for religious reasons.
@Faith,
There was a snake in your yard before the black snake arrived. 😉
@Ruby, I like your "being frugal" as a side gig. I guess I could say that too.
@Faith,
Hi-LAR-ious story! If you are looking for a side hustle, you could always rent out the snake.... there seems to be no end of pesky people knocking on doors trying to sell something .....
Prepared? Absolutely not. We were fine a year until our landlord cashed in on the real estate market and we had to move. We were able to put a little in savings each month before this.
Now? We are $400 short each month if all goes well. Dh is disabled and a fall risk, so I can't work a regular job. I do Instacart and Spark. I LOVE to grocery shop so its actually fun for me. Instacart can be very good, I've had weeks in the low $200, but I spend a lot of time watching my phones because the trips can go in seconds. Spark is more pickup and delivery and because there are WMs everywhere, the trips are shorter. That helps because our only vehicle is a 2001 Tahoe with almost 300K mikes on it. My average with Spark is a little higher. I've been doing both for over a year, so happy to answer questions since its something many can do. I'm 54 if that makes you think you can't do it. Long term I need to find an online job to save the car. However, I was a SAHM then th had his stroke, so I have no work history for the last 30 years.
We are not weathering this personal recession well at all. Right now, the Tahoe is sitting parked in the driveway because the engine is leaking coolant and we can't afford to get it fixed. Hopefully when I get paid on Wednesday we can look at it. I already cashed out Instacart to buy gas and groceries so it may have to wait another week until dh's disability check comes. I've been worried about finances before, but this is the first time I'm thinking we may not recover. Sorry for all the negativity, but it's the reality.
@Jennifer, I feel ya. Sigh. But take heart--there are really lots of online jobs with no experience really necessary. You'll find something.
@Jennifer,
I admire your drive! I pray you will find the answers you need right now!
@Jennifer,
I wish you the best in this difficult journey. I pray the answers will come.
@Rose, I have hope that someone will give me credit for life experience, if nothing else!
@JD, It does take a lot to get me down, I don't quit. Thanks for the prayers.
@Bee, Both sentences mean the world. Thank you!
@
Dear Jennifer,
My thoughts and good wishes for an online job or otherwise helpful thing to happen very soon are sent to you wholeheartedly.
@Jennifer, Ruby Receptionist is a decent remote receptionist job. It may fit your needs.
Live long enough and you're bound to experience some reversals in fortune. We try to hedge recession no matter how we're doing financially. You never know what's around the corner. You could end up widowed, divorced, out of work, or out of luck. It pays to plan ahead.
Like you, we live below our means. I think that's key.
Side hustles work better if you live in a city. But there are ways to make money in the country too. We have sold goats, chickens, ducks, and rabbits. I prefer to give eggs away so I don't have to keep too many chickens.
It's good karma when you can give something to the guy who fixed your septic system, the tree cutters who bring you wood chips, or the neighbor who calls to check on you regularly.
I also design book covers on the side and occasionally some editing work. It's the kind of business that lets me decide when I want to work, so it suits me.
I am in a personal recession now. Husband has had one medical issue after another since the 2nd week in January. He hasn't worked since and was our big bread winner. I work, but half of my check is paying back a 401k loan. Savings helped initially, but we have resorted to selling things to make ends meet. Another way to make some extra money is donating plasma. I've been doing that for 3 weeks now; and will continue to so we can have some extra income. Disability will take 257 days to make a decision on his claim....crazytown. I would have never thought we could manage on what we have but the Good Lord takes care of us well. Prepare for the unexpected.....it happens to us all at some point.
@TT, I've been where you are except when dh had his stroke, we had no other income. I hadn't thought of plasma, but why not? If you get a chance, can you share a little more. We were lucky, dh was approved for disability in just 5 1/2 months and I hope your 257 days is far less. We are selling things as well and I don't know about you, but it's not as hard as I thought it would be. So far it's nothing precious and water and electricity are, so...
@Jennifer, check online for plasma donation centers. I go to a place called Grifols plasma center. You do a screening, physical, and watch some videos. They use your plasma to make medications for people that have hemophilia and other illnesses. I think the pay varies. I'm near Houston Texas. I made $100, $125, and $125. It takes about an hour once you get signed in. You can donate 2x a week. I'm going once a week.
@TT, My thoughts and prayers go out to you. My husband was diagnosed with cancer this February and has been out of work since. Luckily, his job pays sickness and accident benefits even though it’s only 70% of his income. I teach so our bills are covered. I honestly can’t imagine how you’re feeling not only being stressed over your husband, but also with finances. Are there any other side jobs you can do? I know we can only do so much. I pray things get better for you.
@Ruthey, thank you for the kind words. Mine has cancer too. He's self employed so no benefits. We have sold some items and should be ok. God's got this too.
Today's blog reminds me so much of an article that Amy Dacycyn wrote in The Tightwad Gazette back in the early '90s. She talked about always living below your means because the bad times will come.
As an example of living badly she pointed to an episode of "Roseanne" when the family had an unexpected $50 left over after paying their current batch of bills. Did they save it because they were chronically short of money? No. Roseanne snuck out and bought a $50 bottle of perfume and Dan secretly bought a bell for the boat he was forever building in his garage.
Very thought provoking. Some people seem to be able to plan for the future and others, not so much. And then there are the folks hit by a life tsunami, no matter how hard they have worked.
Still, we have to try.
Probably a lot of what I think and write has been originally inspired by Amy! 🙂 She is the original.
@Anne, when you are chronically short of money, you tend to snatch at any little bit of joy you can get. After all, finances are always a disaster anyway, so might as well have a little treat now to cheer yourself up for a brief stab at happiness.
George Orwell wrote about it in 1937. "When you are unemployed, which is to say
when you are underfed, harassed, bored, and miserable, you don't want to
eat dull wholesome food. You want something a little bit 'tasty'. There is
always some cheaply pleasant thing to tempt you. Let's have three pennorth
of chips! Run out and buy us a twopenny ice-cream! Put the kettle on and
we'll all have a nice cup of tea! That is how your mind works when you are
at the P.A.C. level. White bread-and-marg and sugared tea don't nourish you
to any extent, but they are nicer (at least most people think so) than
brown bread-and-dripping and cold water. Unemployment is an endless misery
that has got to be constantly palliated, and especially with tea, the
English-man's opium."
@Rose, I don't disagree with you that in tough times, a treat can be a treasure but I think as a society, we are too quick to soothe ourselves with material things. This doesn't work for me. Ya, it's nice to have a nice purse but for me, it's nicer to know that I can pay the mortgage, and the electricity and for groceries today and also tomorrow. It's like my kids and ice cream...when we go out for a cone occasionally, it's treat. When I buy a tub and it's in the freezer, they have it everyday. No longer a treat - now it's a habit. For me, spending is like that.
@CrunchyCake, well said.
@CrunchyCake, I'm not disagreeing. It's a personality thing like the marshmallow test given to toddlers. Some people are way better at postponing rewards than others.
For me, too, daily pain and exhaustion have a lot to do with my behavior. When literally every muscle in my body hurts, I will do anything to try to make it better, even if it's looking at an upcoming auction of the things I collect. Tomorrow will hopefully be better but right now I need something to keep me off the ledge.
@Rose, is that from _Down and Out in Paris and London_? I'll assign my students to read it every few years and it really hits home of how much energy it is to live in poverty.
@bettafrmdaVille, It's from The Road to Wigan Pier, one of my favorite books and even better regarding living in poverty, I think.
I do have a first edition from the Left Book Club but one of my ambitions is to have a signed Orwell, my hero. Alas, he signed very few books.
If you've never read it, you should. I find it extremely funny in places but then apparently I'm one of the few people who find him funny. The bits about the tripe shop are so awful and funny.
https://orwell.ru/library/novels/The_Road_to_Wigan_Pier/english/e_rtwp
@Kristen, discovering Amy's work was one of the great blessings in my life.
@Rose, ...""when you are chronically short of money, you tend to snatch at any little bit of joy you can get"". Well said!
And this explains why lipsticks sales go up when facing an economic crisis.
It does not need to be big luxuries, but small ones does lift the spirit up (if you can afford it to some extend, of course. If you have to choose between a lipstick and milk for the week, better to skip the lipstick I guess).
Saying this is wrong is the same as saying that someone on food stamps should never ever be allowed to buy junk food. Well....... that is not fair. Healthy food is better for you but once in a while a chocolate bar is damn good and everyone deserves a little pleasure.
@Rose, of course! I should have figured that out from the year, as Down and Out (which I would highly recommend as well, if one can get past the anti-Semitic language and the rape scene) was published in 1933.
@Ruby,
Mine too!!!! She changed my outlook on frugality and helped me to make better decisions. Although my husband never bought in to extreme frugality, the changes we made helped us immensely.
@Rose, almost fifty years ago I was a single mother of two with no degree and a low paid office job. NOBODY even pretended that woman's work, back then, should be paid a living wage. And I did not have a well off ex-husband. We were pretty low on the wage scale.
That doesn't change a thing. Of course you want to indulge yourself when you're unhappy. I totally get that. All the more reason to suck it up and find low cost ways to make it through life.
It rains on the poor even harder than on the rich.
@Isa, my mom used to buy a 6-pack of Hershey bars to donate to the food bank for that very reason, that sometimes someone just needs a little treat.
@Bee, Amy D saved my life I like to say. She taught me how to be frugal and hubby never complained cause he was brought up by a very frugal mom. She had to feed 4 kids on an airplane mechanics salary that was subject to strikes. Amy D taught me how to be frugal as my mother was the original yuppie. She worked full time during my school years and always bought the best. I would have rather had her at home but can't change that now.
@bettafrmdaVille,
I feel uncomfortable reading anything with anti Semitic language.
@Dianne in CO, such a great gesture!
Although I feel prepared for a “personal recession”, I am exceptionally concerned about the current economic climate. Given my age - late 50s - I am acutely aware that the current recession and aggressive inflation in the marketplace could derail our retirement plan and change how we will live out the rest our lives.
As I age, I feel that I have less time to overcome the bumps in the economy. My husband and I knew this was coming. There are almost always signs that the economy will be slowing down before we feel it personally. We pay attention to economic statistics. We are also acutely aware of the impact of fiscal and monetary policy on the economy as a whole. Thus, we have been watching with concern over the last 18 months and have been trying to figure out how to position ourselves for what is ahead.
Although I know how to stretch a dollar, rising prices have me shaking in my boots. In the fall of last year, I noticed my monthly expenses began increasing significantly, and this increase has continued over the last 9 months. Everything from homeowners insurance to a haircuts has gone up considerably. Overall, our expenses have increased by approximately $1200 a month over the last two years and our (husband’s corporate) income has increased by approximately $583 a month. Thus, our savings rate and buying power have decreased dramatically.
I won’t bore you with the breakdown, but this does not include any major lifestyle changes whatsoever. BTW, this rate of increase is much higher than the 9.1% annual inflation rate that is currently being reported.
There is not much in the area of spending and savings that we are not already doing. As someone who has been frugal for decades, I have always watched expenses, stocked the pantry, bought secondhand, and purchased items on sale. My husband and I don’t spend a lot of money on entertainment or take out. However, I have been going through our budget questioning everything. My husband is frugally challenged and will not accept some cost cutting measures easily. However, depending on how things go, we may have to consider things that we really don’t want to do.
On the income side, it gets harder to increase the inflow of income through traditional work as you age. Ageism is alive and well in Corporate America. Looking for a new job at 60 is not the same as it is at 40. So it is essential to increase income in other ways. Although I retired from the 9 to 5 early, I have bought and sold antiques and collectibles on the side for 25 years. I have had an antique booth, sold at vintage markets, on eBay and Facebook. I have also conducted estate sales and pop-up markets. Over the 6 months, I have noticed a slow down in the purchase of luxury and non-essentials goods. This may be a sign of a general decrease in disposable income. Of course, this impacts my side hustle dramatically. Since it costs money to buy inventory for resale, I am being more cautious about purchases and watching my margins. However, it can also create opportunities if people begin to sell off items as they did in 2008.
Life is always about changing and adapting. But I do wish I could just cruise along in utter bliss. I know this is impacting our household and I have great empathy for all who are effected by a “personal recession” and the current economy.
It is not my nature to be argumentative. As an retired economist, I feel that it is important to clarify that the definition of a recession is two consecutive quarters of negative economic growth. GDP shrunk in the first two quarters of 2022. Therefore, we are in a recession. This may not look like the Great Recession or the Recession of the Pandemic, but it is a recession just the same.
Wishing everyone good health and peace.
@Bee, I agree with the greater-than-reported-rate inflation. My spitball arithmetic shows about a 15 percent overall increase in our spending with no significant changes in purchasing habits. There are some major spending items on our horizon and we are concerned that they will become out of reach when it finally becomes unavoidable to do some of that.
@Bee,
Thank you, Bee. Very well said.
@Bee, You are correct in what you have said. We are in a recession now. I wish more people would believe it. I am on a fixed income though I worked for 53+ years full time without a break until I was 72. I have had to give up many things to pay for food, gas and shelter. I did not expect my retirement to be like this but I am thankful for good health and to have a home and food.
@Bee, you are straight on. I'm worried because hubby wants to retire in 2023 and we still have our 28 year old daughter living with us. She doesn't contribute any money but pays half her health insurance bill. Next year she will need her own health insurance. And she is a type 1 diabetic so there is insulin to pay for. So she will have it rough. I am glad dh and I have money saved for retirement and a nice emergency account that helped when our water heater went out a week ago. It was easier to pay $1800 because we had the money.
Our side hustle is reselling on eBay. My hubby does all the work of listing and shipping. I help find items, plan sourcing outings (we love the hunt!), and clean items on occasion (he usually does that, too). I try to make up for the work he does by doing everything house/cleaning/cooking related. We both work regular jobs (I am lucky to only work four days a week). I don't put pressure on him to list, and sometimes he may take a week off or several days. He doesn't put pressure on me to clean more often. 🙂 It works. Since we are always out looking for items, we buy everything we can for ourselves secondhand as well. It takes time, but we both really enjoy it.
We are in a recession. We had two periods of negative economic growth and no amount of gaslighting by the media or the regime in charge can change that.
That all said, the 2008 Great Recession was actually, at a personal level, not all that impactful for me so recessions do hit people differently. In the case of that, I was scared to death I would lose my job so I really started to sock away cash, saved for retirement when I first could (although I wish I had started earlier as does everyone) and took on every bit of overtime I could. I also put off moving out of my parents house (I still paid a whopping $200/mo rent to them) and in the end I made out quite well.
Other people I know were ruined by 2008 and have never fully recovered.
So yes, get yourself debt free, live frugally and you can weather storms easier (not easy but less terrible.)
@Battra92, Please do not attempt to make a non-political post political.
@Tamara R, Remember, this is the corner of the Internet where everyone is welcome and accepted.
@Battra92, well said.
@Battra92,
I think that you bring up something important in this post. Sometimes with financial downturns come opportunities and it’s important to position yourself to take advantage of these. Unfortunately, I can’t see where the opportunity is in this recession. Increasing prices are eating up my savings.
@Bee, I feel ya. If I knew where the opportunities were I'd be taking them!
@Ingrid, I think @Tamara R was just pointing out that we're discussing frugality here, not politics, and politically charged comments in any context can be upsetting to some, which to your point, makes others feel less welcome and accepted.
@Bobi, @Tamara R, Battra92 is a long time poster here. He is a well respected and highly valued member of our community. I completely understand the point he is making and I did not read it as being overtly political. To Kristen's point, and as many of the comments reflect, none of us need outside validation to know if our personal recession is real.
@Dicey, I agree that Battra92 is a valued member of this community and I enjoy his comments as well!
My point was that even a thinly veiled comment can be construed as political and with the current state of our society *may* be disturbing to some. Just because you didn't find the post to be overly political doesn't mean others didn't and shouldn't we respect them as well as Battra92?
@Bobi,
It is difficult to discuss the current economy without any reference to politics. Fiscal and monetary policy as well as some domestic and international policy impact our economy in a myriad of ways.
@Bee,
there are more people living on the earth than ever before, they all seem to want eat higher on the food chain and imitate what the rich do, where they go, and what they have.
that was easy
@Bobi, you asked, so I'm responding, albeit reluctantly. It sometimes seems that people are extreme in their expectations of others. You construed the comment as political, I did not. If we must all examine every single word because something *may* be disturbing to someone, how do we ever have any meaningful discourse? He didn't take a side or slam an individual specifically. "Regime in charge" sounds like he is deliberately not being political.
What Bee says on 9-9 at 11:26 nails it.
Kristen asked her readers three questions today, all specific to how we were each preparing for our own personal recession. Conversely, this reply began with the throwing out of a highly charged word, 'gaslighting,' in a context that was a personal, political opinion.
The beauty of this blog over the years is that it has allowed people from different walks of life to find a place to share and enjoy the path of frugality. It works because we put out personal beliefs aside while we commune here on frugality and thankfulness and what we made for dinner, and what makes us happy. It is a gift and a treasure, and I hope it continues to be so for many years to come.
This is a timely post. I expect to see a lot of good comments here.
Like Jennifer, my no-frills budget currently says I need more than I earn. We were debt free till recently, but we had to have work done on the house that my husband could no longer do, and paying for home care and assisted living, and now part of his nursing home fee for my husband took the savings I had set aside for my next car, so I have a loan on my new-to-me car, too. On the plus side, at least I have some retirement set aside, and I'm old enough to withdraw without penalty! I hope to work until I'm 70, to get the largest amount of Social Security I can. My husband took early SS, but it goes to his facility. This is the third big "personal recession" in our marriage.
I'm trying to work through this particular recession by watching all my spending, and by trying to spend, when I do spend, chiefly on things that will save me money in the long run, such as gardening supplies, canning supplies and a good sewing machine. I watch for sales and use whatever tricks I can to spend less for them. I was hanging in there much better before inflation hit.
Years ago, the company I then worked for suddenly filed for bankruptcy. I was lucky - a small group of us were immediately hired by another company that took over our contract with a big client, but so many of my fellow long-time employees in their 50's and early 60's at other sites were let go with no notice and no termination package. We had all already watched our company's retirement, which was shares in our company, go down to zero value. All of us had to start over building our retirement savings, but how were these people to start over at 60 with no job? This happened at almost exactly the same time the Enron situation happened. It made a big impression on me and I was more careful to save for a rainy day in someplace safer after that.
My dad had side hustles doing welding and small engine repair. My kids did babysitting, house and pet sitting. My SAH mom kept a child in our home during the day for a mother working an outside job a few times, then she worked as a school aid for three hours a day for several years. I have helped people with some writing tasks, such as writing business plans for small business applications and - this will date me - I used to work evenings for Sears in the weeks before Christmas, calling people to let them know their wish book orders had arrived at the store . My sister has done home organization for people as a side hustle. There are some interesting opportunities out there for those who are able to take advantage of them.
@JD,
I often think about the challenges that you have faced over the last several years. I know it has not been easy, but you have maintained such a positive outlook. I truly admire that. Each stage of life certainly has its complications. I’m not liking the 55-65 stage much. I’m always trying to be prepared for the worst while trying to expect the best. It’s exhausting!!!!
@Bee,
Thanks and amen! I've been really bothered for some time that we are so dependent on what the stock market is doing when we retire. We might have a comfortable IRA, or we might have one that has plummeted in value and will no longer provide as we hoped it would. You are right, each stage of life presents its own problems, but retirement seems scary because the chance to rebuild after loss is pretty much gone in that stage. It is what it is, at that point, and while one can supplement with hustles or jobs, very few are able to create any substantial income in their 60's, 70's and 80's. It is very tiring, as you say!
You didn't mention one big "personal recession" that will happen to everybody at some point - retirement!
It's sort of like losing your job, but again, when you "lose" a job, you kind of expect to go find another one to replace it. But when you retire, you generally DON'T expect to replace that job, and your income takes a hit.
Even if you have a pension (many places don't offer them any more) plus Social Security (and who knows how long THAT will be viable), there are adjustments that have to be made. You may not have to drive as much back and forth to work, but you may travel more - road trip! You may not have to buy clothes specifically for work, but you have to wear SOMETHING - LOL!
You may still have rent to pay, and even if you have a house, you may have a mortgage, and even if it's paid off, there are still property taxes and utilities. When you turn 65 you have to sign up for Medicare, which takes a chunk pour of your presumed Social Security check, plus medical needs tend to become more frequent and more expensive as you age.
My point is that EVERYBODY needs to start building that financial cushion IMMEDIATELY, even if it's only a very few dollars at a time. If you don't touch it, it will accumulate faster than you'd expect.
When we were starting out, my husband and I would dump any change we got during the day into a coffee can . When the can was full, we'd dump it out, wrap the coins and deposit them into our savings account. These days many banks can set up an account where your extra "change" can be deposited. Your credit/debit transactions can be rounded up to the next dollar and the excess is automatically deposited into the account.
Sorry this is so long, but I have seen so many of my friends struggle after they retire because they didn't plan to build a cushion, and it doesn't have to be that way.
@Ruth
Well said, Ruth. Thank you.
Even if you retire with a nice nest egg, there are things you never think will happen. AC and heaters go out, cars lose a transmission, long term sickness or injury, and disease. Even with insurance, it can only cover so much and the rest is up to you.
With an active income you can always make more, but with a retirement fund, it gets chipped away--even faster if the stock market drops and you're left with a fraction of what you spent your whole life saving.
No one ever tells you what happens after you stop working.
@Ruth, On a related note, I can't tell you how many people older than me, I'm 54 who are out doing Door Dash and Uber Eats. These people are doing to supplement Social Security or to survive. I talked a man the other day and he was picking up a Door Dash order. He was 74, retired 4 years ago after working since he was 19 and had to DD to make ends meet. You do what you have to, right?
@Jennifer, that is sad (unless he enjoys it)
@Ruth,
My 73 year old friend, who’s husband pass away 10 years ago, is working two days/week so that she can afford to not worry about groceries and have a little fun money.
In my neighborhood I see all sorts of people—young and old—gathering cans for recycling from the trash.
It’s scary. I think I’m saving a lot but if I retire in 10 years, how far will my savings go in, say, 20 years?
Thanks, Kristen, for yet another thought-provoking post and set of questions.
I am not in truly dire straits, and I genuinely feel for those of you who are (especially Jennifer and TT, so far). As noted in my Meet a Reader interview, I have a paid-for house and car, and (knock wood) zero credit card debt. But I share precarious positions with many of you: retirement with the retirees; newly single status with those who are widowed, divorced/separated, etc.; and caregiver status with JD and others. And I have the usual expenses that go along with house and car ownership, plus various "X the Unknown" things that crop up.
So I too am trying to live very carefully. And since a lot of us are invoking Amy Dacyczyn today, I'm practicing yet another of her principles: tweaking various homekeeping and spending practices till I go one notch below where I'm comfortable, and then tweaking them back up to my comfort level. In one way, living alone makes this easier, since I have only my own comfort level to consider.
I'm also trying to do things that are good for my health anyway: one mug of coffee in the morning instead of two, sun tea instead of Diet Pepsi, less salt on everything, etc. The less time I spend in medical offices and the fewer medications I need, the better off I'll be, both physically and financially.
As for "side hustles," I don't have those so much as I have hobbies that have very modest payoffs instead of costing money: dog walking for neighbors, trashpicking, bottlepicking, thrift shopping, rollover of thrift shopping "mistakes" at consignment shops, etc. I can always kick up the game a notch on some of these if necessary. I can even go back to free-lance editing (for my former employers or others), although at this time I would much rather not. So I do have options, and I know I'm lucky to have them.
We have been through a ton of recessions and always will, but here were the ones that were meaningful to me:
73-75 If you're old enough, you'll remember getting in long long lines for gas. Also, Nixon and his price controls. Jobs were scarce and I had entered the job market. My parents believed 18 year olds should move out after high school, so I did and was on my own. Pretty scary. I used to buy Kraft macaroni and cheese boxes (3 for $1), add a can of mushroom soup and a can of tuna and that was dinner for 2 nights.
90-91 Savings and loan crisis, which happened just after I had bought a townhouse ($107K at 9.5%) I took a second job, as a night secretary in a law firm.
2008-9 The subprime mortgage crisis. I met my boyfriend after a divorce and we bought a huge house together. The value of the house dropped $150K overnight. And then my BF lost his good job. We sold the house at a loss, wiping out one of the legs of our retirement planning, but it didn't wreck our credit.
2022: Yes, this is a recession. Or a pre-recession if you prefer. I am 67, still working at a well paid job and collecting full social security (which you are allowed to do if you reach full retirement age. Do this if you can!) I am healthy and strong (I walk 3-5 miles a day, 6 days a week), and this will help me work until 70+ It also helps me deal with stress. Go to the doctor and the dentist regularly. Manage your health. Don't gain weight and lose it if you have. That's my biggest frugal advice: the predictor for serious health problems like diabetes, heart disease, some cancers is obesity. Those problems are expensive and shorten your life.
My husband had a side job of coaching for 4 or 5 years. We were able to save enough of his coaching income that (theoretically) we should be close to covering our kids' tuition until they graduate. It's a huge relief knowing that the savings are there.
I coached one spring season a few years ago that was little kids one night a week and made a couple hundred bucks.
You have to have the knowledge and skills to coach, but it's an option if those things are there.
I have some more to say, besides the retirement thing. I was divorced before I met my current husband. I got the house (my parents had helped use with the down payment), my car, and most of the furniture (my family's castoffs). I had a good job, but my house and car payments were more than what I brought home on my own. I got behind on my mortgage - panic!
So I got a part-time job at an auto parts store, which pretty well covered my gas and utilities, and on my lunch hours, I'd go to the local plasma center and basically sell my plasma twice a week (the maximum allowed) which took care of gas and groceries (sort of). I stopped ALL eating out, and started cooking at home as cheaply as possible. I bought 25-pound bags of rice, dried beans of all sorts, and the cheapest cheese and canned tomatoes I could find, and I pretty much had beans and rice for dinner and peanut butter sandwiches for lunch. I was able to grow vegetables in a small garden, and that helped, too.
After I got a raise at work and a tax refund, I was able to quit selling my plasma, and after I could my house I was able to get an apartment with a slightly lower rate than my mortgage payments had been, but the rent included all utilities and of course, repairs, so I was able to quit the part-time job. It was a long slog, and NOT FUN AT ALL, but I got through it. It can be done! It helps if you believe the bad circumstances are ONLY TEMPORARY (hence the name of my blog - LOL!), and that you CAN and WILL get to the other side.
On a different note, something that has made things easier for me and my husband is that we keep our cars until they lay down and die. Our records are my current car (226,000 miles), his old pickup truck (280,000 miles), and my old minivan (270,000 miles).
Same with appliances. Last year I replaced my 35-year-old range because the oven heating element broke (yes, broke!) and the replacement wasn't available anywhere. The same year I replaced my 21-year-old refrigerator.
We do a lot of our own work. Three years ago our water heater died and I bought a new one, brought it home, and That Man and I installed it ourselves, including revising the plumbing, which is what we generally always try to do, unless we just don't have the capability.
So now we owe NOTHING. No mortgage, no car payments, no credit card debt. If something goes on a card, we pay it off immediately. It makes life so much simpler. It took a long time to get to this point, but we're STUBBORN - LOL!
Good grief this thread is depressing.
I was raised in a family with money and connections and they and their friends all made me sick. So I guess my rebellious streak was to be as poor and unbraggable as possible. I'm as happy as a little pig rolling in the mud when I'm living on next to nothing. However the way I was raised gave me all kinds of life skills I can never overcome and I will always feel guilty for the ease at which I can land a job or a place to live. Life isn't fair and I don't like that. A lot of people are struggling now and some people are going to make a lot of money off that.
@Tiana, Ha! I went to a very prestigious, expensive college, and a friend of mine, whose family lived on Fifth Avenue, etc, was sent a very pricey coat by her mom, and my friend went into a hissy fit about her mother "trying to buy her love" and everyone commiserated and I was like, "Can I have that coat then?" Ha! It was a beautiful Perry Ellis coat and I wore it for many years. My love: purchaseable.
(My friend is now a very important judge in California. I'm an extremely unimportant writer in New York. Guttersnipes gonna guttersnipe, I guess.)
@Rose, I never really liked perry ellis, awful fragrances too.
@Rose, Even in our situations, I bet you and I are happier than your friend the judge. As bad as things are, my kids are healthy, happy and self supporting. I have plenty of online library books to entertain me and dh has an IPad (from better financial times) that can keep him going for hours.
@Jennifer, Oh, I don't know, she's pretty happy! Ha! She spends a lot of time hiking with her dog in northern California and has more than once argued a case before the Supreme Court. Number of cases I have argued before the Supreme Court remains steady at zero. Heh.
@Rose, Well crap, there goes my "too much is not a good thing" theory!! 🙂
@Tiana,
Oooo, I used to love Perry Ellis (the clothing, not the perfume).....I couldn't afford the clothing back then, but always looked for similar knock-off styles.
Oof I feel this currently. We moved six months ago into a slightly larger house with more land, and really felt we could handle the couple hundred dollar increase in mortgage. But, since then, our gas and grocery bills have obviously increased tremendously as well, and we've had multiple large unexpected expenses (broken bone, car repairs, termites, broken phone...). My husband has a good job but the pay depends on what location he works at (construction related industry) and recently he's been at a lower paying site. So basically all of the buffer we used to have is gone.
We've cut wayyy back on eating out, I'm questioning every purchase at the grocery store, driving as little as possible, and just signed up to board dogs at our home for some extra cash. I am an RN but have been a homemaker for the past 3.5 years with our 4 kids. We are starting to more seriously consider me returning to work but I'd much rather do something from home for now.
Thankfully our retirement accounts are in good shape as we will probably and hopefully only temporarily stop contributing to them.
@JP, I recently saw on tv that people are renting out their fenced backyards hourly as dog parks! There's even an app for it.
Hi Kristen, having tried the organizing/decluttering hustle during a bad stretch, I would highly NOT recommend. It's all perfectly lovely when it involves people you know or are referred to you, but when you venture into the realm of strangers, there's a whole lot of crazy out there.
I can't tell you the number of people who expected me to do their laundry, including hand washing their underwear. Yuck, and the answer is no.
Or the people who would surprise you with a snack or lunch, and then try to deduct it from their bill. Another no to that.
But the worst was the woman who called mid closet clean-out to tell me she wouldn't be back in time for her baby to wake up from her nap. I wasn't aware that she had left or that I was alone in the house with a baby. Obviously I couldn't just walk out and I had to threaten to call children's services to get paid.
All in all, not a fun side hustle. Unless you have a licensed agency to protect your interests, I would not recommend.
@Jeri, OMG.
That said, would 1000% hire Kristen to sort my life out tomorrow. Do not have babies, dirty underwear, or charged-for snacks.
@Jeri, So sorry to hear about your troubles and must beg forgiveness for laughing throughout the entire post. If it helps, I really needed the laughs. Please forgive me.
@Jennifer,
Same here.....I was both horrified and laughing at the things people tried to pull on her. Yikes!
We had a personal recession when we (I) stupidly thought buying an old house in a neighborhood we didn't know very well was a good idea. We had just had our second child and I think I was having some serious hormonal mental issues because the thought of moving (we were renting at the time, but the owner wanted to keep it on the market, and if he sold it we'd have to move) was horrifying. It was A Bad Decision. The house turned out to be a moneypit and the neighborhood was awful.
So that turned into over a decade of trying to fix it up and move. I don't want to think about the money we lost, and it's mortifying that I was the cause of it all. Anyway. We weren't putting anything away for savings or college. Luckily, my husband is very good at budgeting and managing money, and once we (HALLELUJAH) sold that albatross, and began renting, not owning homes, we've managed to put quite a bit away so that if bad times came, we could do pretty well for a while.
I have never had a side hustle; homeschooling four boys has taken up most of my time. I am good at editing and proofreading, so maybe there are online job opportunities there. Before I had kids I worked in a library and I loved it. If I weren't highly allergic to cats I would like cat sitting!
I have always lived my life waiting for financial catastrophe to strike so have always tried to be prepared. Part of it is listening to my parents talk about how the communists and then the Nazis ripped apart their lives, which put me in the mindset of always expecting the worst. Then the early years of being very poverty stricken after my parents got to the U.S. Then my father invented something, made a huge amount of money...then lost it investing in a business...then invented something else. We lived very up and down. The boarding school I was sent to was staffed by nuns who had lived through the war in Europe and before we could graduate, we had to know how to raise food and slaughter a chicken and a pig...just in case. I went off to college and did not have contact with my father for all the years I was in college and then grad school, so no financial support from him and money was tight. The most stable my finances became was when I married my husband and he convinced me to live on his salary and bank mine. I thought we were in hog heaven, as they say, travelling all over the world and also having great jobs that we both loved. Then his cancer. We built back up. Then my prolonged illness. The saving grace at the worst times was that we had paid off our house in our late 30s, so were never under the stress of being house insecure. Now we are old and by living some years in extreme frugalness (we joke that we did everything short of reusing our toilet paper!) have a comfortable financial cushion, again. We live modestly and frugally and still do some side gigs for our former employers and also the mystery shops---not only for the extra little luxuries but also because it keeps our aging minds sharper than they would if we sat around and did nothing. So here is how I answer your questions, Kristin: I prepare for the catastrophes to come by being the best steward of what we earn and own, which to me means two things---spend wisely/frugally and doing something every month to add to our financial cushion. I could not agree more with Kristin @ going country that something like gardening is a side gig. I would add foraging to that, both in learning things like what weeds are really nutritious greens in disguise and which mushrooms will kill you, and signing up for one of the foraging sites that tells you where in your community there are things like blackberry bushes or trees where the apples are free to harvest. I have a friend who keeps saying these are frightening times. I don't agree---it is life that is frightening, with some catastrophe always possible no matter how good political or economic conditions might be. If you keep that in mind all the time, you don't get complacent. I also believe that if you reach out and help someone who is struggling, it comes back to you tenfold. I know there is no scientific proof of this, but I have seen it and experienced it myself time and time again.
@Lindsey, I just love your comments and outlook on life. In real estate, they say it's location, location, location but in life it's definitely attitude, attitude, attitude! (And you clearly have a great one!)
I've been fortunate that:
1. I was raised in a frugal household who taught me the value of saving money
2. My parents were teachers and always had side hustles, which taught me to always have side hustles
3. In much of my 20s, I was a grad student who made little money which taught me the necessity of living frugally AND having a side hustle (I waitressed on weekends which was good cash and free food and an embedded social life)
4. I now have a good paying job but I continue to practice frugal ways AND I keep up with side hustles: I teach an extra 1-1.5 college classes per year (so not enough to exhaust me but a nice chunk once or twice a year); I maintain a non-profit website; thanks to Lindsey (non-consumer advocate) I have been doing mystery shops since February. This past week, I did 4 gas station shops ($20 in free gas + $55, $70 in overpriced groceries + $27, free dinner at Spanish tapas restaurant & free brunch at Spanish tapas restaurant). As my bestie says (who was my dining companion and so also got a free restaurant meal): my hobby is being frugal.
PS: Let's not forget that the gas industry are enjoying RECORD PROFIT in 2022...
@bettafrmdaVille, Would you be comfortable naming the mystery shop company? That is something dh and I can do together.
This year my husband & I have voiced many time how glad we are that we've lived frugally for the past 35 yrs. We loosened our budget a bit when we hit the empty nest but still lived within our budget & saved all we could. This year we've been hit by so many things. The good side of weathering hard times is when you've planned ahead you don't have the financial worry weighing over your head. Everything that's come up...we've been able to cover. We weren't happy to have to spend money on hard things but isn't that why we save.
in 1970, our daughter was three months old when the Army gave my husband an early discharge and his new job paid about half what he'd been making. I am so glad thrift stores carry good baby clothes since you really do have to buy a whole new set every few months.
In 2008, we sold our house just before the market tanked. We bought a motorhome and went traveling the country which turned out to be a lot cheaper than owning a home.
So we've survived both types of recessions and are doing just fine now in retirement.
We have not suffered any major personal recessions, but on two occasions my husband was out of work for over a year. On both occasions I increased my workin g hours and we "lowered our standard of living" aka made some prudent choices with regards to our spending. We still adhere to most of them, even now my husband is back in the workforce (He found a job in his original field of IT expertise, at 60. We were so happy!).
I read a few comments of people selling plasma and I am in two minds about that. It pains me that people should literally have to give their life's blood to keep out of debt. And I am aware that people may take risks with their health because they have little choice in jobs.
If I were to get a side hustle I should like it to be in the line of teaching or writing. I was intrigued by Rose! Titles, please!
So many good perspectives and comments here, I really wanted to share a bit about my story too. I was born in Croatia, both of my parents came from really poor backgrounds, they finally started to build a house and a life and place of their own, and then the war happened just as I started school. We almost lost the house, I remember a lot of times not having enough food, you can forget about treats. My parents worked really hard and somehow we managed through. I remember secretly looking at their bank statements and they would always be in the red. It stressed me out, I can only imagine how stressed out they must have been. They're doing much better now but I always worry if they will have enough, what will happen if something happens to my dad...I have my own family now and I work really hard on being frugal and using what we have. Not as good as I could, but I am trying every day to improve. We don't have as good of an emergency fund as I would like, and our retirement is poor. But we also started later, both my husband and myself got PhDs so that was a lot of extra schooling and delayed income...you can only do so much on a $20k stipend (before tax). But I just got a new job with a large pay raise, and the garden is finally starting to come together (we just bought a house 2 years ago, while I was 8 months pregnant), so I feel like we are finally catching up. Still, this recession worries me a lot.
Thank you Kirsten for the wonderful posts that keep me fueled and everyone for the slew of comments, I love this space so much <3
My biggest takeaway from this post is how popular "side hustles" have become. As recently as the mid 2000s, people were still working part-time jobs. Now everyone is hustling for money but back in the recession of the mid-70s, The Hustle was merely a disco dance! 😉
@Bobi, I get you, thanks for the laugh! I do know how to dance the hustle as my much older sisters taught me.. Do the Hustle1
My husband is a pilot and we have hit a few rough spots with the potential for furlough. We have made a point of living below our means. We also made it a priority to pay off our house as soon as possible.
My husband and I have been very, very fortunate to be able to get through tough times and not suffer. I turned into the glass is half full kind of girl and always counted our blessings. So despite having two kids with hearing loss, both needing glasses, and me being a sahm. Recessions came, I worried about hubby losing his job but that has never happened.
If we were to face hard times we have money in the bank and other ways to cash out. Dh will retire in 2023 and I'm having some anxiety about that but I think we will do ok. Our "starter" home is paid off, cars are paid off and we have no credit card debt or any other kind of debt.
In my 20's I often worked two jobs. One was as a waitress where I made a great amount of money on Saturday nights. I've worked at Sears part time and for Tiffany's part time as Christmas help. I've had gastric sleeve weight loss surgery in the last year and that has helped my health so much. I'm mobile again and can cook, clean and do shopping searching for bargins.
We are so blessed and I thank God every day for our blessings.
Very good post. I actually worry TOO much about this topic. We live below our means and save each month (and have a very good social security net). Still, I constantly feel worried about a potential personal recession.
I’m 69 so I’ve been thru the upside, downside and whatever financial corrections you want to call it.
I went back to work part time as I was bored and I missed the social interaction of the work environment. The extra $$ provides a safety net for whatever comes our way.
My family is experiencing a personal recession. Not our first, which is why we live beneath our means. It does give us the opportunity to reprioritize our spending habits. We aren't big spenders, per se, but we will hold off on any splurges for now. Dang, I miss the occasional splurge! 🙁
Our recession is completely out of our control due to the following:
1. Hubby is a mortgage broker, and no one is refinancing right now. Business is OK with home purchases, but that's it. Plus, he is competing with so many other mortgage lenders, he's cutting his commission to stay competitive.
2. Hubby's side hustle is part-time teaching at the local community college. Due to low student enrollment (apparently all across the county), his classes have been cancelled over the past year. Tenured, full time faculty get priority.
3. Our health and dental insurance has been through the community college. Since he's not teaching, our insurance was dropped. We now have to insure our family through my part-time job. This takes 50% of my pay away, and our insurance coverage is not as good, meaning co-pays are much higher (now $90, formerly $15).
4. We have opted out of dental insurance, and (fingers crossed!!) won't have any need for emergency work. We are paying bi-annual cleaning costs out of pocket.
We're making do, and we'll be fine. It's simply a time to cut back and be more aware of our spending habits. If we can do it, anyone can!
I faced my personal financial crisis as a 20 something going through a divorce and left with nothing but a huge stack of debt. I had a baby to raise and literally no money to feed myself. I allowed myself one glass of grape juice each evening. This would make me feel full enough to sleep. I ate once or twice a week. I washed my baby's cloth diapers in the bath tub because I didn't have enough money to wash and dry at the laundromat. Little by little, I paid my way out of the debt I owed and then my parents gave me a huge hand up by allowing me to stay with them until I could pull myself back up. It wasn't easy but I learned a lot and now that times are tough once again, I know I can do it no matter how much sacrifice and hard work is involved. That experience gave me faith and confidence for which I will always be grateful.
Great post! The last two years have been my first personal recession. With school shutdowns and limited child care support, my husband and I have both lost a lot of work time. He is a small business owner and I am an academic, so our income is closely tied to how many hours we can work. Luckily we've still had an income, but it was much smaller than it otherwise would have been. "Personal recession" is a great way to describe it. Unlike when I left work and went back to grad school and we knew how much our income would drop, there was the uncertainty of not knowing month to month what things would look like. Would we still have a business at the end of the year? Would I regret buying needed replacement sneakers for the kids if our income dipped again next month? Side hustles aren't an option for us (if we had extra time we would make more by doing more of our main jobs). Instead living below our means throughout our marriage saved us. Our only debt is our mortgage, and we were able to pay that and put food on the table. We we into COVID with a lot of savings too, which we dipped into in leaner months.