10 October 2008

I'm not melting down

Here's the thing. I'm not worried about the economic "meltdown". I'm really not. Thus far, it's not the next Great Depression (and I honestly don't think it will be). It's a lot better than that. A lot. So, I kind of feel like people need to get over it and stop panicking.

Sure, our IRA's and 401(k) have taken a hit--as of yesterday 7.2%--but they've got time to recover. Lots of time. We don't depend on that money to live, so why worry about it right now? The whole point of a retirement plan is to put it away, let it do it's thing (with ups and downs), and use it in retirement. So, no, I won't be pulling my money out of the stock market. In fact, I'm a little bit excited for Craig's next paycheck when we'll be putting more into his 401(k) because we'll be getting an awesome deal....just think of the returns when the market goes back up!

Have you ever seen It's a Wonderful Life? It's like that. What was the problem that kept George from going on his honeymoon with Mary? A run on the Savings and Loan. People panicked. Not good, that panicking. But Potter, he bought while everyone else was wanting to get rid of stock. And he eventually made a lot of money off other people's panic. So, while I never imagined myself saying this, be like Potter.....or at least like George and stay calm, don't do anything rash.

Let's talk about the economics of "Main Street" since we're hearing so much of that lately.

The biggest chunk of our budget is our mortgage. Because we bought a house that was within our means and we were smart enough to get a fixed-rate mortgage, that amount stays the same. Not a problem. Choices have consequences, I think we made a good choice.

The things that have put a little bit of a strain on our budget in the last year are groceries and gas. But, we simply cut back on the unnecessary items. For example, since Craig started working from home we decided that we could drop down to one car--two was a luxury.

Most of the people I come into contact with are in the same situation as we are--maybe things are a little tighter than they used to be, but you drop a couple of luxuries and it all evens out. In fact, those who I know that are having a rough time of it were already having a rough time of it because they have failed to make wise financial choices in the past, and are often still continuing to make those choices.

So on my Main Street, things are looking pretty okay. In fact, I'm pretty sure that those trying to "fix" Wall Street have no idea what's really happening on Main Street.


La Yen said...

I feel the same way. Nothing big is changing for us, and we are actually making more money because of the deployment. (When W comes back from Kuwait we will be taking a cut, though.) I am all excited to buy more with my stock dollars, though. We invest about $150 a month, and are used to getting about a third of a share. Now, though, we are getting half-to-three-quarters a share each time. It will bound back.

sue-donym said...

Great post. Like my husband says, "The stock market is just having a sale."

joelandnatalie said...

C -- I totally agree with you. The only problem I foresee is if we decided to move and try to sell our house (which could be a huge pain, the market's horrible for sellers right now in UT) -- but, even then, it wouldn't be a huge deal, because we bought in our area when things were low, so we'd still get out of it what we put into it, we just wouldn't make a killing.

Yes, you should totally invest in stocks if you've got a little extra! Also, if you've ever wanted an SUV... now is the time to buy!

And about those luxuries... I'm having a hard time choosing. For example, is having a Costco membership a luxury, or is it saving us money? Now that we're about to have a baby, I'm thinking it will probably be cost-effective to have it, just for diapers and milk, but I've noticed that some of the time the grocery store, and sometimes even the dreaded Wal-Mart, have even better deals.

I think it's probably just important to be a wise consumer. When is that advice ever out of date?

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