Effects of Recession
Posted on | October 29, 2009 | 5 Comments
Paul and I feel very fortunate about how we are weathering this recession (knock on wood:)). This is partially due to where we live, as Texas has fared pretty well in this recession compared with other states. Our good fortune is also partially due to the types of jobs we are currently employed in—I am working for the state as an environmental investigator, and Paul works in IT with a company that is closely tied to the health industry.
But there have been brushes with this recession. My agency, for instance, has been asked to cut its budget by the Governor, and thus parts of our budget have been cut. This has largely affected raises and cost of living increases, which have been capped (although that seems like a commonsense move in a recession). As a precaution, Paul and I have been trying to be especially frugal lately because even though we have no indication of losing our jobs anytime soon, there is always the “what if”. For example, we do not go out to the movies as much, or out to eat as much. Granted, we did recently purchase a home, and we are working on paying cash for our wedding and honeymoon, but we started this behavioral change before putting our focus into these two large life events.
Some of the positive changes we have seen have been the amount of sales and coupons available in the last five months or so for everything from travel, to furniture, to food. Also, people seem so much more willing to talk about being frugal (and in a good way!).
I thought it would be interesting to open up a talk with you about the effects you are feeling from the recession. Perhaps you are cutting back in certain areas or you or someone you know has lost their job, or your 401(K) match is being cut. Have you seen any positive changes from the recession?
- Frugal Confessions – Frugal Living
- Dave Ramsey’s Total Money Makeover: Could his Plan have Caused us to Take on More Debt?
- Combining Finances
- Spending Lockdown: When Your Stockpiles Come in Handy
- A New Series: Save Beyond Your Means
Comments
5 Responses to “Effects of Recession”
Leave a Reply
Previous article: « The High Cost of Fear and Responsibility: How to Cut Down on Insurance Costs
Next article: It’s Frugal Confessions Friday!! »
Subscription Options
Meet Amanda
Blog Sponsors
October 29th, 2009 @ 1:25 pm
I wouldn’t say that we are cutting back on spending any more than before. Considering my husband and I both work for financial services companies, we definitely feel lucky that we haven’t been too effected so far; both of our employers have done fairly well considering the rest of the economy. We already had built up a comfortable emergency savings, but if we hadn’t then we probably would have tried to boost that a bit. My employer, PNC Bank, did acquire a struggling bank, National City, and so far the integration has been going well. Although, it was just announced that next year our 401K match will be reduced from 6% to 4% in order to “remain competitive” with other financial services companies. They also stated that based on employee surveys, employees are placing a higher emphasis on good health benefits versus retirement benefits and so PNC has shifted its focus based on that as well. Unfortunately that doesn’t effect me because we are both on Scott’s health plan, and it still remains the better deal of the two. As much as I’m dissapointed about the cut in my match, I still feel pretty good about my benefits because 4% PNC is one of the few companies today that still provides us with a pension as well… at least for now
[Reply]
FruGal Reply:
October 29th, 2009 at 7:25 pm
Dear Aurora,
Thanks for sharing! Bummer on the 401(K) match, but that is awesome that your employer still has a pension plan:).
[Reply]
October 29th, 2009 @ 4:05 pm
When the recession hit I was in graduate school and no longer living off my parents and since they pay you peanuts in grad school I started being frugal right off the bat. So I haven’t had to change my habits.
I have been keeping a closer eye on my savings because I am in the midst of planning my wedding.
I just wanted to point out something I learned recently at my job. My employer doesn’t pay for sick days; it has to come out of my personal time, which I only get 12 days worth of a year (and this year and next I am saving my days for the wedding and honeymoon). I can choose to take the sick days as unpaid…but if you are out sick for a few days that can be a big chunk of your paycheck.
So something else to consider in anyone’s quick access emergency fund is to factor in possible sick days that you have to take unpaid. By “quick access” I mean a savings account that you can have quickly transfer to checking without a waiting period, or checking account, or piggy bank, or a stash under your mattress…something that doesn’t have a waiting period.
Since I just started working what I consider to be a “real job” (aka not graduate school) my emergency fund isn’t that big. It is also through ING (which is awesome by the way) but sometimes ING can take a few days to transfer money if you request it on a weekend or holiday so it isn’t as quick access as I would like….so I just “hide” money in my checking account as a little extra padding “just in case” and I also put money in my piggy bank for very quick emergency access.
[Reply]
FruGal Reply:
October 29th, 2009 at 7:28 pm
Hello Michelle!
I know—I love ING!!! It makes me quite happy to put money into it. Also, we are planning our wedding as well! It’s nice to meet some other people in teh same walk of life as you. That is a big bummer that you get no sick days from your employer. I am also trying to save up everything for our wedding/honeymoon, and know how that can feel. I hope things are working out well for you! Thanks for the comment.
[Reply]
October 30th, 2009 @ 3:15 pm
My husband and I both have had our salaries frozen for the last year, which is super stinky since both of our jobs are low paying anyway…oh well.
On the positive side, we have jobs. I still have my 6% matching in my 401k, I still have full benefits, he still is working towards a pension, and we have made a bunch from the economic crash since I maxed out our Roth IRA while the shares were half price and have nearly doubled my 401k shares for the same reason. We’ve already bounced back from the crash in my 401k and we have an overall 10% return on the Roth IRA…not bad since I’ve only been contributing to it for 2 years and it keeps going up.
[Reply]