I am unemployed but doing OK

[TwixVoy]

Well I have been unemployed (by my own choice) for a little bit now. Quit a bastard mega corporation that was using me to screw over people not even making enough to survive. I am currently exploring options to make income other than working for a mega corporation from now on.

Things are going OK for me. (but I realize they would not be OK for many people in my unemployed position) At the rate I am tapping savings I will be able to survive with out a job for at least 3 years (unless massive inflation kicks in, which I don't see happening) by my math before having to tap retirement accounts.

I have no debt of any kind. I saw this coming way back in 2001 and have been planning for it from that date. I remember in 2001 reading an article that was mailed to me in one of my financial magazine subscriptions about how common 50 year mortgages were becoming, home equity lines of credit used to finance consumer goods, and the number of college students and other unqualified people being given high limit revolving accounts. I still remember thinking to my self at the time "Oh shit". I sought out more articles at the time and in the years following. Every year I became increasingly convinced the country was going to be in for another major depression.

I have always been interested in finances, and read financial articles every day. It was obvious to me for a long time too many people were getting in to a position of substituting wages that weren't enough with credit. It was obvious to me that a large part of the country had been programmed to believe that financing literally EVERY aspect of their life - school, cars, boats, consumer goods purchases - was acceptable and good.

I know the media is trying to push "a recovery is just around the corner", but in all honesty it isn't folks.

All these posts I keep seeing from people saying "Lets not pay our credit cards to protest" honestly do make me feel bad for people in debt to the banks.

Let me tell you right now though that your best plan is to do exactly the opposite. Recovery is not just around the corner. This time next year will be extremely bad. I read economic articles every day. The fundamentals have NOT changed. If you still have a job and are in debt GET OUT OF IT ASAP. Cut your expenses down to the bone if you have not already. Look out for your family in friends. If they are in a position that is bad consider helping them out even with just advice. You will need to pull together with them through this eventually. The country is going to be in for hard times like we have never seen before, and we will need to work together with people much more closely than we have been.

Add up your LIQUID assets and your liabilities. This will give you and idea of your net worth. If your net worth is a negative number then you are in trouble and need to take immediate action to turn it around. Make that number a positive if at all possible. A lot of people never get taught this, but a positive net worth is vital to financial security and well being.... especially where we are headed.

[CrispyQ]

1. The media has lost all credibility.

I always wondered that no one in the media ever asked "Deficits don't matter" Cheney if he conducts his personal finances by that philosophy.

It seems the main factor they consider is the stock market. A week or so ago CNNs Ali Belshi was going on about the gains in the stock market & some small uptick in housing numbers & said we were possibly turning the corner. To his credit, Anderson Cooper asked Belshi about jobs & how could we be turning the corner if the jobs were still disappearing at alarming numbers. Belshi had to sheepishly admit that Cooper was right - the jobs numbers were bad & yes, jobs are a key to the economy. :eyes: :crazy: :eyes: :crazy:

The corporate class is still in denial that they've eaten the goose that lays the golden egg.

on edit: spelling

[stopbush]

2. Everybody should stop using their credit cards for purchases

and pay down as much debt as possible. People need to take this seriously, because being relatively debt free is something of a panacea. It's best to try to systematically pay everything off. I have done this a couple of times in my life. I start by paying off the cards with the smallest balances first while paying the minimum or minimum+ on the large debts. As the small cards are paid off, you can put more per month against the big debts. Yes, the big debts are incurring more interest on the high balance, but I've found that closing the smaller accounts gives one a feeling of "I can do this."

If I get a decent tax return or a chunk of money falls into my lap, then I make a big payment on one of the larger balances.

If you owe over $10,000 on a particular card, I believe the issuing company has to offer you some kind of settlement for less than the full amount.

And you may as well get used to the fact that your credit score will take a hit. That's usually the first thing you have to let go of.

If everyone followed your advice consumers would be in the driver's seat when it comes to credit. Over the past three years, I have paid off $30,000+ that my wife and I held in credit card debt, and we now have it down to about $6,000 on 2 cards, which is under 5% of our yearly gross income. We hope to paid that off within the next 8 months.

We use our bank debit card for purchases - if the money's not in the bank, we forgo the purchase.

It's tough, but it can be done.