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Economy for 2011 - Your Thoughts - Page 2

post #21 of 38
Quote:
Originally Posted by Rosebud1 View Post

Just want to add that I too believe that paying for things on credit and through debt cannot continue endlessly.  I was Christmas shopping (where I live in Canada) in a very busy department store.  When I paid the clerk in cash (I use cash because then I know I have the money.....) he looked kind of surprised.  He said that he had been on the register for three hours, and I was only the second customer who paid in cash.  Now I am told that many Canadians use debit cards, but still!  That's pretty crazy!



 Actually, I think most folks use debit cards instead of cash now anyway.  I work at CVS and I would estimate that probably only a quarter of the customers who come through my line actually use cash, and most of them are only using it for purchases of like one or two items for less than $1.  Probably only 1 person a shift writes a check, the rest is all plastic.  However, most of the plastic is debit cards rather than credit cards.  DH and I no longer own a credit card, but we almost never have cash. 

post #22 of 38

I pay for virtually everything with my credit card.  Never use the debit card.  I pay off the credit card each month in full.  Then once or twice a year I trade in my points for a gift card.  I have even used my credit card to make the down payment on a car (even though I had cash to do so) for the points.  I imagine there are more of us than you think.  It might look bad, but I live a very frugal life, do not impulse buy and don't carry debt (other than my student loan but I put aside the money to pay that in full in the bank.  It collects in interest while it is deferred).  Credit can be used without being stupid.  The only think I pay cash for is gas because around here they charge extra for credit.  I wouldn't assume that just because people are using a charge card they are in some kind of massive debt.  I have read that only about 50% of Americans actually carry a balance on their cards; of course this makes the average debt statistics even more scary because it is only being carried by 1./2 the populltion.  But still, don't assume the worst. 

post #23 of 38

Big picture, I don't see things going anywhere good.

 

In my own family, we're actually doing better than we were a year ago. We're both employed, we're both able to get as many hours as we need to pay our bills, and we have health insurance again. Neither of us is likely to get a raise (COL or otherwise) this year, but we're also much less afraid lately of either of our employers going completely under. My employer has made it known that no raises = no layoffs, and I'm cool with that.

 

Extended family, not doing so great financially. My in-laws have every available bedroom filled with unemployed children, grandchildren, and spouses.

post #24 of 38

not holding my breath for a recovery. for us 2011 brings still living within our means, saving for a rainy day and also keeping money in another currency nod.gif

post #25 of 38

I agree, we use our credit cards for a majority of purchases with exception to groceries, gas, etc (things that we wont have anymore when bill comes in). We also never carry a balence. We are what the cc companies refer to as the 'dead beat customer'- we use them for an interest free loan for 30 days. They still get 3% for me using it, but we refuse to carry consumer debt.

 

My family is in a stable place. With our simple living practices, being frugal and our natural living tendencies creates a pretty debt free lifestyle w/ exception to our mortgage. OTH, I know several families where one or both of the parents are out of work, underemployed or alternative employment options or switching gears and leaving their previous career for whatever reason.   

 

I personally think 2011 will be a rebuilding year, but I think it will be several more years before this country is in a better place. I personally see the housing market staying in this place for 3-5 years.

post #26 of 38
Quote:
Originally Posted by EmsMom View Post

I pay for virtually everything with my credit card.  Never use the debit card.  I pay off the credit card each month in full.  Then once or twice a year I trade in my points for a gift card.  I have even used my credit card to make the down payment on a car (even though I had cash to do so) for the points.  I imagine there are more of us than you think.  It might look bad, but I live a very frugal life, do not impulse buy and don't carry debt (other than my student loan but I put aside the money to pay that in full in the bank.  It collects in interest while it is deferred).  Credit can be used without being stupid.  The only think I pay cash for is gas because around here they charge extra for credit.  I wouldn't assume that just because people are using a charge card they are in some kind of massive debt.  I have read that only about 50% of Americans actually carry a balance on their cards; of course this makes the average debt statistics even more scary because it is only being carried by 1./2 the populltion.  But still, don't assume the worst. 


We do the same.  Credit card gets used for everything-groceries, gas, clothing, online purchases, etc.  The bill gets paid off in full every month.  We have accumulated tons of points and cash back bonuses that we can use for just about anything--we travel alot and have used the points at hotels, for airline tickets, rental cars.  We live below our means and put a great deal into savings for retirement, rainy day, and our kids college education.  We've always been smart with our credit and we know other families that do the same.  Not everyone who makes a purchase on a credit card does so because they can't afford to otherwise.
 

post #27 of 38

I think right now people are SCARED of credit cards because of what happened with rates when everything crashed.  I mean, my personal card shot up to 29.99% immediately and they slashed my limit in half(that I'd been paying down for years) to within $250 of my balance.  Those two actions made my credit score tank.  I'm too scared to get a credit card now.  I think a lot of people are just as worried as I am.  The fees and the threat of fees and rate hikes is enough to make the "convenience" of a credit card not worth it.

post #28 of 38

There is not enough tinfoil to wrap my head with.

post #29 of 38

Honestly, I did the whole 'doom and gloom thing' since 2007. We are still here. It's not the best economy, but it's not so bad. Do I think it will ever be back to that 'high'? No, because it was an artificial high. Do I think we are going into the whole 'the end of the world as we know it' scenario? Heck NO! lol

 

I think people are getting back to being frugal--the only sustainable way to be. We as a society just took a detour the last decade and a half. But tinfoil, doom and gloom---too much energy worrying over something that may or may not happen. As long as you are doing the best you can, being frugal, saving, you will be fine. Stressing out about what ifs isn't worth it. Especially since many of the darker predictions of the past few years haven't come about.

 

Ami

post #30 of 38

I live in the U.K and the outlook doesn't look good for 2011 ~ some economists are predicting that the Government's massive public sector cuts are really going to have a huge negative impact.  Inflation and VAT are set to rise and the majority of employed ppl are not predicted a wage rise to balance that out.  We presently have 2.5 million unemployed and that's set to rise further, especially as the Government are due to cut 500,000 public sector jobs within the next few years.

 

But of course, the top dogs working in the Banks are due billions of pounds worth of bonuses.  Something seriously wrong with that picture.

 

However, the Conservative Party & and the history of their Governance (think Margaret Thatcher) have a loooong history of punishing the poor for their poverty while rewarding those at the top.

 

David Cameron keeps blaming the last Labour Government ~ while they did make massive mistakes, they are just using the Labour Government mistakes to hide their own ideology behind.  This really has nothing to do with how our economy is struggling, it's about implementing the ideology that the Conservatives embrace.  

 

That's my little moan over nut.gif

 

I have a bad feeling that there's going to be a lot of people resorting to debt management plans, IVA's and Bankruptcy over the next 24 months and most definitely, myself included, people are really going to be tightening their belts financially.  Just so that basic living costs can be covered.

post #31 of 38

One of my current biggest fears is all the talk of the dollar losing it's status as the reserve currency. I've read about the UK, when the Bristish sterling lost reserve status and the USA's dollar became the new reserve currency. The English people really suffered from inflation and their currency dropped. Almost every day I read another story about how the Arabs are trading in there own currency for oil sales. Yesterday there was an article that the Yuan would be the reserve currency within 20 years, but I doubt it will take that long.

post #32 of 38
Quote:
Originally Posted by Denvergirlie View Post

One of my current biggest fears is all the talk of the dollar losing it's status as the reserve currency. I've read about the UK, when the Bristish sterling lost reserve status and the USA's dollar became the new reserve currency. The English people really suffered from inflation and their currency dropped. Almost every day I read another story about how the Arabs are trading in there own currency for oil sales. Yesterday there was an article that the Yuan would be the reserve currency within 20 years, but I doubt it will take that long.

20 months maybe?
 

post #33 of 38

I only hope the economy  will get better and more jobs will be available. A lot of people have lost their jobs as well as their homes. So more jobs is definitely needed.

post #34 of 38
Quote:
Originally Posted by WorldsBestMom View Post

I only hope the economy  will get better and more jobs will be available. A lot of people have lost their jobs as well as their homes. So more jobs is definitely needed.



This is an understandable hope, but I think it's going to be gentler in the long run for us to be realistic about what is possible.

 

The economy grew because of the credit bubble.  Job numbers grew because people were expanding their spending with credit, not cash.  Workers came to depend on those jobs.  And now we feel entitled to an economy that has jobs for everyone. 

 

But the credit bubble has burst and needs to correct, which means job numbers will have to shrink because people are (in significant numbers) now spending cash, not credit, so their spending is smaller than before.

 

We have gone from a one-income-family society to a two-income-family society over a couple of generations.  To simpify, that's roughly doubled the jobs.  And our expectations, and habits, and the prices of things, have adjusted accordingly.  The adjustment back to something closer resembling a one-income-family society is going to be uncomfortable because we have this overall cultural expectation, built into our economic practices, that people have a certain level of spending power.  But that was an illusion propped up by credit.  Our "real" spending power per person is much less, and so our ability to support other people's jobs with our spending is less.

 

I am most certainly not a doom-and-gloomer.  I think of myself as a "realistic optimist," and the optimism is in part from believing that if enough people are aware of the mechanism by which our economy got where it is, we'll be able to gently steer our economic practices so that current and coming changes in our economy do not come as a shock.

 

The economy is such a complicated machine. 

post #35 of 38

I'm like to hope for the best but plan for the worst.  What is going to happen?  No idea.  My husband works as an accountant for a law firm who rep's the banks.  He says it's bad. I'm worried though.  :(

 

 I am a couponer and a stockpiler also.  Not so much this last year, which is b/c of having twin 2 year olds and a new baby, but I'm working double time now that I feel like I am able to.  I will continue the year working on keeping my stockpile up - both for myself and for donation.  I already make 98% of our meals at home - breakfast, lunch and dinner. We eat our only like twice a month - usually fast food after church.  The only thing I didn't do last summer that I did previously was 'can' alot of our veggie garden and cheap produce and fruits.  I want to focus this spring and summer doing that for this next winter.  We are not that into jams but I would love to buy a freezer this summer and get some cheap fruits I can freeze and use for baking this winter. 

post #36 of 38



 

Quote:
Originally Posted by Usually Curious View Post



Quote:
Originally Posted by Denvergirlie View Post

One of my current biggest fears is all the talk of the dollar losing it's status as the reserve currency. I've read about the UK, when the Bristish sterling lost reserve status and the USA's dollar became the new reserve currency. The English people really suffered from inflation and their currency dropped. Almost every day I read another story about how the Arabs are trading in there own currency for oil sales. Yesterday there was an article that the Yuan would be the reserve currency within 20 years, but I doubt it will take that long.

20 months maybe?
 



20 months? Seems like it's moving much faster than that.... current story today about just this on CNN

 

http://money.cnn.com/2011/02/10/markets/dollar/index.htm 

post #37 of 38

My I inject a little hope into the conversation?  A strong economy depends largely on a strong middle class.  And a strong middle class depends on responsible financial management and security.  I think (in a highly unquantifiable way!) that North Americans are finally questioning the dogma that they have to spend and go into debt to keep the economy going.  It may explain the booming popularity of Dave Ramsey and his ilk.  Change won't come from structure or corporations (who are too intertwined to care).  We'll have to do what we can, however limited, from a grassroots level.

post #38 of 38

I think the economy is going to sputter and decline until we get some new industry going (like green energy) a la the internet or home sales.  We need a new boom sector to hire people and create new jobs, new technologies, new demand...but there was a sad story the other day about a Massachusetts solar power panel factory moving to China because it's too expensive to produce here.  So, I'm also feeling pretty grim about a new industry sprouting up anytime soon.

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