How are you budgeting for the economy? - Page 3

I'm buying more used vinyl. Well, I did already, but I was also buying a SACD or two or three every week. I've mostly cut that out and buying more music for a dollar or two.

Also, I rarely eat out these days and have been putting almost all purchases on the Amex charge card. I have to pay it off every month - helps to keep focused on what you really need and what you don't.

Fortunately, I haven't been hurt yet by the economy. Though I think it's smart to trim up on spending, kill debt and save cash - I don't know what we're in for yet, but I want to be as secure as possible.

By the way, did anyone else notice that Starbucks' profits dropped 97% last quarter? Wow. I suppose other people are cutting back on non-essentials, too.

People need to be saving more money than they did before just in case they lose their job. A lot of businesses are closing, and if they aren't closing, many have a hiring freeze. So if you are unlucky enough to be laid-off from your job, you'll have a hell of a time finding a comparable one in any reasonable amount of time.

Bingo, its the uncertainty of the future that has many worried. That's not to say that things aren't bad now, 240,000 jobs lost last month and they increased Septembers numbers too. Over a half million jobs lost in two months, 1.2 million since the beginning of the year. I've heard 8% or 9% unemployment by summer. Not good.

Let's hope and pray it doesn't get that far. Right now I believe the figure is at 6.5%, which is bad enough.

I sure as heck hope the world economy doesn't totally collapse. We're had interest rate increases over the last year. It's around 3-4% more, but what a massive difference it makes to what you have to feed to the banks. We're at something like 15% interest rate at the moment over here. The government here had a plan of reducing people's disposable income in order to reduce the amount of debt people can rack up. It might be working, but it's killing me.

Last month was the final straw. I looked at my finances and just called the bank and told them to cut off a credit card. Then I pulled a consolidation loan and massively reduced repayments on other items. This seems to be a trend here. Very bad in the long run, but it's the month-to-month that is the concern most of the time.

My stupid employer also decided no pay increases this year, which now makes it 2 years in a row. :P

I even, with much dread, flogged off my tiny little car which was destined for track use. That hurt, but it's going to make a big difference over the next few months. Can always build something in the future when life is stable again.

And then I found head-fi and bought expensive-to-me cans. Oops.

The plan for the next few months is to increase that monthly buffer of cash. It might just work out as the banks are looking at an interest rate decrease by year end and the fuel price is coming down every month. There are a couple of things that need doing before that buffer builds though. The most important is to get the daily driver's suspension sorted out. You won't believe how much dodgey suspension eats fuel. :P

It's just shocking to realise how those things you considered small monthly contribution payments actually wind up being a killer. They have to go or be reviewed.

Why rely on plastic? Pay with cash/debit cards. If you don't have enough cash, then don't buy it. This obviously doesn't apply to cars and houses. It might be a cultural thing, but people in the US and UK love to finance things, whether it is through their credit card or a bank loan. Sure, you won't be able to buy as many goodies...

I have absolutely no income so I have to adhere to the no cash no buy rule. My parents are working and they have always adhered to that rule. Everything from pencil & paper to violins & watches are bought with cash. If it is too expensive or exceed their financial planning, then they don't buy it. It has worked so far. I'm just curious as to why so many people don't do the same.

^ It took some discipline, but that's where I am now, no CC's and I owe no-one.
It feels very good.

Regarding Credit cards...

Sure the plastic is wonderful invention. It's convinient, accepted everywhere, and so on. And it sounds fancy too... "CREDIT" card.

The only bad thing about it is, you are building debt every time you use it. Other things with fancy names in fact are debts. For example, line of "credit" and "equity" loans.

Only money you can spend without building debt up is your own money. Some people forget this simple fact, drive themselves into trouble at will.

I was one of them. I once owed 45K to CC companies. That does not mean I was spendy or anything like that. None of the debt were unnecessary or excessive, and big chuck of money I owe were my marriage and education related costs. And my wife added about $40K on top of mine, when we got married.

We paid them back regulary, but that never was enough. Thus, one day we sat on the chairs with a piece of paper, pencil and calculator, found the number. In that way, we were able to pay them all off in 2 and 1/2 years. Yeah, you bet we're look like homeless couple for that period of time, but it was one of the best thing we ever did.

We are CC debt free since early 2004... except those monthly gas and grocery, which we sure can afford.

When you find out your CC balance is more than half of your credit limit, and is not changing or even going up, even if you're paying them back bit more than minimum, that's the time for you to be serious. Don't keep it that way.

So if you think you are in trouble, give it some serious thoughts, make a plan, prepare yourself for hard time, FORGET ABOUT HEAD-FI GEARS OR NEW CARS for a while, and pay the debt off before it haunts your life. Otherwise, you're digging deeper holes.

And regarding this economy in crisis...

I don't think I have to cut my spending off. I am frugal guy... bit more so than i should be.

In fact, I need to spend quite lot. My 6 and 8 year old computers need some serious upgrades in near future. My 10 year old car needs TLC. And I don't think I ever bought any handbag for my wife for last 5 years or so. And we hadn't had any vacation trip for 8 years.

If I have to spend, I have to, but it feels like an irony, especially when other guys are selling old stuffs to get few dollars out of them.

For other people in my area, a friend of mine said his small business is not as good as before. And I still see that little "sale" sign on front yards here and there. Last sunday I went to photomac mills outlet mall, the place was crowded like hell. I just not able to see any big change in the area, except the traffic is somewhat less than before.

Just bought a fancy Nokia N82 cellphone.

And my watch broke so I think I'll be replacing it with a rolex.

Instead of buying R-10's, I will be buying the just released Audio Technica ATH-ESW10's, oh, and maybe a new house.

I decided the best way to cut back was only buying head-fi goodies on days that end in "y" ...

exactly. when my cousin in law told me how Americans finance their purchase i find it just absurd and ridiculous. I have never used credit to finance my purchases in my life. I saved for 2 years before I bought my rig. On the other hand, Chinese are too engrossed in savings. My dad told me that most bribes given to chinese officials are in the form of cold hard cash and restaurants are reluctant to accept credit cards. That is probably why most yuan notes are so worn out and dirty.

Financial innovation led to the creation of some short etfs that allows you to profit on the downside (SKF, SRS, SCC). I believe its a great opportunity to use those profits to acquire revalued assets (car, house, land, cattles, businesses) in the states now. While I will not see the benefits in the short term, I believe my grandparents will definitely reap those benefits.

Oh lets see....i purchased 12 sets of KSC75's on sale for $5.47 each at RadioShack, an Alien Dac, ummm.... TomTom GPS, .....

I recycle by purchasing pre-owned!

By purchasing used electronics, audio gear, clothing and other durable goods, I kill several birds with one shotgun blast. Not only do I save money by purchasing used, but I also help the environment by rescuing equipment that may well wind up in a landfill somewhere leaching nasty heavy metals into the groundwater.

Silly, expensive "not-so-green" initiatives notwithstanding, conservation in everyday life can easily be met through buying used. I buy my clothes from consignment stores and outlet stores, my electronics from various places on the Internets, and my used audio gear from good old Head-Fi.