How Is The Economy Affecting You?

by Katy on February 18, 2009 · 17 comments


Economy Graph


I think of myself as having a pretty economy-proof job. As a labor and delivery nurse, my services simply never go out of style. But I’m aware that people may start putting off having a baby. It’s not an unreasonable assumption. I’m also lucky in that I am in a position where I can pick up extra shifts if I need a quick cash infusion. Not everyone has this option.

My habits of conscious frugality are deeply ingrained at this point in my life, which means that I’ll probably never have to change my lifestyle. My only extravagances are having two cars, living as a single family in a large house and never holding off from doing something because, “I don’t have the money.” (I have the money because I most everything I do for fun is free or pretty darned close to it.)

I do have secret back-up plans in case of financial disaster such as selling one of the cars or taking in a boarder. (We hosted a Japanese teacher for free a few years back, and I know she had paid $1000 per month the year before to live with a family while she was a student.) We could also cut our monthly charitable contributions, but that would be a absolute last resort.

My family did just experience a drastic temporary income drop, which was surprising to us. But it’s nothing we can’t weather. I strung an indoor clothesline and am enjoying concocting bean based meals in the pressure cooker. I’m keeping the thermostat set at 60-62 degrees, and I’ll pick up a few extra shifts to bump up the paycheck. (I’m following The Frugalista’s no-buy-month anyway, so I wouldn’t be dining out or hitting the thrift shops even if our income had increased.)

Why brings me to the question:

How is the economy affecting you?

Has your income dropped? Are you being more careful with your money, or maybe spending more in the name of stimulating-the-economy? Has the economic downturn helped you to simplify your spending, and thus your life? Or, are you not affected at all?

Please share your thoughts in the comments section below. (I’m especially interested to hear from readers outside of the U.S.)

Katy Wolk-Stanley

“Use it up, wear it out, make it do or do without.”

{ 17 comments… read them below or add one }

CLM February 18, 2009 at 7:37 am

Hi Katy,
You asked about the economy and how it is affecting us. Well our income has dropped, it had dropped by more than 2/3 as my husband was unemployed for 4 months. He managed to find a new job and started last week. He did take a cut in pay although there is the possibility he could make more as he moves ahead. We managed to pay most of the bills in a timely way and never missed paying our mortgage, having purchased a house within our means.
We have been living off my part-time job and my teaching (fitness classes), so I work about 30 hours a week. We have 3 children, only one left at home. We are very frugal having lived with one car, no dryer, and no cable for the past 12 years. That being said, it is becoming harder to stretch the money we do have, the medical insurance (we pay our own totally) and food and transportation are taking up a larger hunk than they used to. We are used to living frugally and I think that is to our advantage however I’m being to wonder how long that will hold us if we should have another down turn like we did at in the fall. I’m not sure how we would survive another job loss or emergency medical problem (my husband had to have surgery last year.) We went deeply into our savings, thank goodness we had some but we would have to start taking money out of the retirement funds which shrink daily as the market continues to head in a downward trend. At mid-life, I find some of this quite unsettling as I feel unsure about the future economy.


steplikeagiant February 18, 2009 at 10:33 am

Partially due to the economy and partially due to my own cutting back on work, my income this coming year will be less than 1/2 of what it was this past year and close to 1/4 what it was in 2007. Since all the money I made the past 2 years went to paying off students loans, paying the taxes on the money I made and into savings, I think I will be ok. My dad lives on less than 10K/year and I was raised to live on the cheap so it’s not new. But it is scary. In the past it has been a choice, now it is an utter necessity. Health insurance is my number one concern. It is so expensive, taking a huge piece of my income. Doing the same things as everyone else. Eating simply, house at 60 and 56 at night, line drying, etc. No extraneous purchases. It’s been a lifestyle for me forever, so nothing new, but now everyone I know is living like this. Also at mid-life, I find myself looking for security more and more through community and frugality.


Kate February 18, 2009 at 12:38 pm

Reading those two responses above mine makes me very grateful for my situation (re: health care). My husband and I both have fairly secure jobs. We have company-provided medical insurance on top of the provincial medical insurance every person in Canada can have. My husband’s company even pays the provincial insurance premium (a variable rate based on income).
We are accustomed to living a more frugal lifestyle as I don’t work full time. Certainly most people in this town think we are a little odd. This is a town that has always loved its big toys – ironically now most of those jobs are gone and people are selling their toys (resource-based town).
The place I’ve seen it is in our pension and retirement savings. ouch, they took a hit! But we buy in every paycheque, so as someone pointed out to me, right now we are buying low.
Our town will be hit hard, and businesses will suffer in response. But we will stay, as we are ok and we love it here. It will be interesting, though, to see what this town looks like in a few years.


Jan February 18, 2009 at 1:58 pm

Well, I did lose my job on 1/9/09. I am very fortunate that I will/am receiving 14 weeks pay, and my health ins. is covered during this period. The job market is extremely tough in S. FL and I haven’t received 1 call back yet on all my apps/resumes that I have submitted.

However, we are living very frugally. Our mortgage is covered & I’m paying the minimum on my student loan & cc (yes, I unfortunately have one of those) and socking the rest into savings. I’d rather have the nest egg to fall back on and then up my minimum payments once I’m back working full-time. Luckily our weather is nice so the windows are open & we don’t have to use the A/C or heat. I hang my clothes to dry & only drive when it’s necessary, which is usually to buy groceries or meet my friends for a run at the track.

I’m also selling on e-bay so I have some extra income, although small, coming in that way as well. My DH has his own business & it’s been slow, but we put together a new marketing campaign for him, so once his materials are printed, he can hit the road & I’ll keep the business going on this end so he can focus on his sales. He doesn’t want me to work for him, but it turns out that I’m slowly doing so.

Sorry for the long post – just letting everyone know of our situation. It’s not that bad, compared to some people I see!


Sandy S February 18, 2009 at 4:57 pm

My husband and I both work in manufacturing and both of the companies we work for are doing poorly revenue wise. We currently have jobs but feel we can be laid off at any time. We have always been good savers and have a sufficient nest egg to hold us over for at least a short period of time. Last fall we decided to “only buy what we really need”. We have found it pretty painless to stop buying things, but also find it is still easy to spend money as some maintenance on the house or cars or some medical bills always seem to come up and all of these things have risen dramatically in price. We’re just hoping this madness will end soon. We try not to listen to the media too much, it just makes us more anxious.


susan smith February 18, 2009 at 9:29 pm

Hi: As with your other Canadian respondent we have health care at a fairly low rate. Being retired we pay for it ourselves. Fortunately we don’t need any medications which can be very expensive. Also with being retired there is always the worry – will our money run out before we do?
I was interested to read on another website that someone was being hassled for being frugal. They were accused of not being a good Americans and spending to support the country. This surprised me as Mr. Obama seems to be saying “be responsible.” Best wishes to all. Susan


Mary February 18, 2009 at 11:34 pm

We put cash in envelopes for each category of living (groceries, babysitting, eating out, gas, gifts, etc.) When the envelope is empty, no more spending until the next month. It’s amazing how much less I spend when I’m handling real, green, paper cash (as opposed to a credit card, where I am a little more removed from my money). Also, I do cut coupons. I don’t eat alot of pre-packaged food and I don’t have pets, so most of the coupons I don’t use. But I do buy toilet paper, laundry soap, Airborne, gum, goldfish crackers, and diapers- all of which I wait to purchase until the item is discounted at the store PLUS my manufacturer’s coupon. Thank you for your Blog, it’s really inspirational to read.


Non Consumer Girl February 18, 2009 at 11:44 pm

I am in Sydney, Australia and we are a family of 3.

We have recently had about 7 months of living on just one income through conscious choice, so we have had a bit of a head start. But it has been some big decisions and lifestyle changes that we did over a period of time to be able to facilitate this.
1. We sold our huge McMansion house and the huge mortgage. This was in a huge estate with lovely new homes, but no public transport, no local shops (15km drive to the nearest shop), no services, just lots of big houses.
2. We bought a small modest townhome, in a great area in Sydney, walking distance to everything (trains 5 min, shops, village, friends, good schools). We now have a mortgage we can manage on one income.
3. We sold our second car. We make do with the school bus, trains and taxis in an emergency. And we walk everywhere.
4. We sold and are still selling lots of the excess furniture from our huge house, that we just don’t need any more.
5. We moved to an area with good public schools, so that we didn’t have to pay private school fees until high school.

Now we can sleep at night. Our townhome is a lot more modest, but peace of mind is priceless. Over time, we will update it, with paint, floorboards etc but in the meantime, it is very liveable (it is 14 years old).

It has taken a lot of effort to live a more simplified, financially secure life, but it has been worth it!


mamma February 19, 2009 at 12:01 am

I have started planning more for longterm sufficiency. My children are adults with big mortgage payments. That scares me because I know where they and their families would end up if they were indigent. So, I have made sure I have enough rabbits to keep production high enough to feed a dozen people. I have increased the chicken flock by several dozen hens, and kept more milking goats. I have also made sure to have BIG livestock dogs to watch over the flocks. We have enough seeds to last three years just in case we can’t get more. Most of our thoughts have simply been on preparing for the worst “just in case”.
We haven’t bought a new vehicle even though the older ones are paid off. We choose to drive older autos. We have enlarged garden space for this spring. We replaced the furnace with a new unit to decrease need for gas. We have even added a couple of “out buildings” to our property in case we would need more room for animals, wood, or food supplies. We are also increasing our fencing for flocks if need be.
I would like to build a root cellar, but that will be a summer job. As far as cash, we are trying to balance keeping cash versus buying supplies like food for storage. Supplies are inflation proof, but cash is not.


rekindled February 19, 2009 at 2:05 am

I work as a adult education tutor which is probably one of the few ‘industries’ that will benefit from the recession. As people lose their jobs they often look to re-train while they are looking for work.

My husband works for a software company as a developer and they have recently been making redundancies. If my husband were to lose his job then we would probably lose our house as my salary alone will only just cover the mortgate, and as much as I like my home, I also need to eat! We have put all our savings into our home so at the moment we don’t have a safety net if things do go wrong, which does worry me.

Living in the UK I am fortunate that I don’t have to worry about medical insurance.


rachel February 19, 2009 at 2:40 am

I also live in the uk so dont worry about medical insurance although i had an operation in the new year that may have had better care and attention if i was going privately (sorry = politics but i had a horrid time).

Im also a single mum on benefit or welfare as our overseas cousins would say. I worked for 25 years and then after my divorce stayed at home for the last few years. Now my daughter is 5 years old and started school i have been rushing round to get a job, but its soooo difficult. Those of you just having lost jobs are finding it difficult so imagine someone that most employers wont even consider having been out of the ‘workplace’ for 5 years.

Having been on very limited income for the last few years i have been used to being frugal. No tv or dryer. heating set low and extra jumpers and shawls. walking everywhere or getting the bus (cant afford to run a car). But costs are going up and im watching the pennies, still cooking from scratch most of the time, but invested in a slowcooker a while ago-very little electricity and lovely cooked stews and casseroles. Yes, it was new, but it is well used and a good investment.
The good news is Ive just got a volunteer job at a not for profit company for a few days – creating art and music projects in schools and the paid staff started as volunteers so heres hoping it might lead to something more.


Julie February 19, 2009 at 6:36 am

We tried for 9.5 months to sell our home which is way too expensive on 1 income and we don’t like it anyway, as I’ve posted about before. Even after a $100,000 price reduction, we could not sell it. Many people said they loved it and we thought an offer would come, but one never did. People are just too scared to commit now. We have no other debt, no cc, no car loans, so that’s great. But we’re going through our savings paying for the one extremely un-frugal thing we ever did—buying this house! And I have a medical problem that’s not covered by my husband’s insurance so I can’t work. I’m so jealous of you all with no health care worries!


Magdalena February 19, 2009 at 8:17 am

We just took a huge reduction in income, too, and we are going back to homesteading. We have gotten out of most debt, so we don’t have constant need to generate income, except for necessities. Since we are sharing a property, we expect to have just construction costs – which we plan to minimize with reclaimed materials and our own labour. Like Mamma above, we will go back to raising animals and a huge garden, weather and critters permitting.

My husband will work part-time and we will be back in the farmers’ market with handmade goods to sell.

We don’t have medical expenses, and God willing, I will be able to keep treating herbally the acute illnesses we so rarely have!


Wendy February 19, 2009 at 4:48 pm

At the moment we are without health insurance so this is a big worry. We make too much to qualify for the state plan for the self-employed, and too little to afford a policy. I do worry all the time about this. And to Rachel, private insurance is not all it’s cracked up to be. Profit motives of insurers can, and do, interfere with necessary tests, etc. My dear mom, Susan, had the best insurance and died due to complications from ankle surgery in 2001. She was just 57. Also if you were in the US and couldn’t afford the insurance, you might have not been able to have had your operation. Count your blessings. I know your system might not be perfect but at least it represents one less worry.


Jinger February 19, 2009 at 4:57 pm

My own recession began over 3 years ago when I lost my home, job and possessions due to a natural disaster. I have lived on a very small retirement benefit since then with occasional work in my field, in a small apartment and with few material possessions. But, even so I have a rich life, full of meaning and I am very thankful to be alive. So, as I tell people, this recession isn’t affecting me, as I have nothing left to lose.


Jodi February 21, 2009 at 7:31 pm

My husband lost his job last summer, just as we were completing a major house remodel. Fortunately we were mostly doing that remodel on money saved for it. We lived on unemployment and my half-time salary for the remainder of the year, at which point he found a new job. It’s 2/3 of what he used to earn, but since we are used to living well below our means this will work well for us. With only one car, walking and biking almost everywhere we go, all local food, low energy use, and utility payments our only monthly bill, we will be fine. The one sticking point is the tuition for my son’s private school (our refuge from the huge classes and endless testing of the public schools; our school district also just banned the showing of _The Story of Stuff_, which confirms that it is not he place for us), which is by far our biggest expense. We’ve had to cut down our savings and charitable giving rates proportionate to our income, and that’s a hard place to be. Given the posts above especially, I am grateful every day that my job provides us with excellent heath insurance and that we are very healthy.


Tammy February 22, 2009 at 2:16 pm

I live in Canada…extremely gratefull for the social programs our very high taxes pay for such as healthcare. I know my husband and I will not lose our jobs (due to tenure of 17 yrs for husband they must give him a very expensive management package in order to fire him) and myself working for a not for profit company that in 75 years has never had mass layoffs. I am very fortunate but we still worry and have changed the way we spend our money. Fortunately the way we have always lived(living in 50% income and investing the rest) has allowed us to have more breathing room. We cook from scratch. Always buy used when possible. Use coupons and remember where we came from (both grew up poor). I worry for our friends who do not live the same way. Worry for relatives who are not so fortunate. So when I do spend money based on our situation I try to remember: where is that money going. Is it going to support my local economy? If the answer is no then we don’t buy.


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