Preparing for Economic Downturn in Austin (San Marcos: appointed, HOA, loans)

[Trainwreck20]

If I was very near (or in) retirement, I would worry more. I am hoping to do well this year - on my BILs advice earlier this year (he is a financial manager), I have rear-loaded my 401K deductions...of course, it could just keep going down .

It is kind of odd, I know things are supposed to be bad, but what am I supposed to do different? I will need a new car in the somewhat near future (I am not really kidding about the 10 y/o car above), but I don't really like getting a used car, since I like to keep a car for at least 8-10 years, so I will end up getting a new one, I guess. I suppose I could lose my job, but it doesn't look likely in the near future. I don't have the excessive 'consumerism' habits, but I do tend to spend the money that I am going to spend....not really disciplined enough to become a miser. I suppose this means I will continue fueling the 'machine'. I dunno....I just watch and listen, and then switch back to the football game .

[austin-steve]

No changes here, on the personal front. We already have no debt other than real estate. We already live moderately frugal lifestyle. Haven't sold any stocks. Getting ready to buy another investment property before year end.

On the business side, as small business owners, we are down about 15% in revenue from last year and are working much harder to earn the 15% less. But that's normal and expected as everything goes in cycles. The cycles are never unexpected, but the timing and impact are always hard to predict.

Steve

[Moonlady]

I work for a large international manufacturing company and they are already taking steps to cut costs in anticipation of a major downturn.

However, I spoke too soon when I said I was keeping my old car and sitting on cash. There was another thread on here about it being a good time to buy a pick-up. So, I bought one I'd been looking at - I did get an awesome deal. And fortunately, my position is secure even if business drops off, so hopefully I didn't make a mistake!

[Trainwreck20]

Heh, I say that thread too, and I casually looked at a few pickups on line. I currently drive about 3500 miles a year (and no change expected), so gas mileage is not a big factor, so if I do stumble across a good deal, I may have to take it.......

[rg80]

Just a quick FYI: Austin wasn't hurt as bad as the rest of America during the great depression - so most likely it will not be hit too hard now.

[Austin97]

Originally Posted by Trainwreck20

If I was very near (or in) retirement, I would worry more. I am hoping to do well this year - on my BILs advice earlier this year (he is a financial manager), I have rear-loaded my 401K deductions...of course, it could just keep going down .

It is kind of odd, I know things are supposed to be bad, but what am I supposed to do different? I will need a new car in the somewhat near future (I am not really kidding about the 10 y/o car above), but I don't really like getting a used car, since I like to keep a car for at least 8-10 years, so I will end up getting a new one, I guess. I suppose I could lose my job, but it doesn't look likely in the near future. I don't have the excessive 'consumerism' habits, but I do tend to spend the money that I am going to spend....not really disciplined enough to become a miser. I suppose this means I will continue fueling the 'machine'. I dunno....I just watch and listen, and then switch back to the football game .

#1 thing is to have 1 year of living expenses in cash. Then you dont have to sell equities during a downturn. Unfortunately this one will last until 2010 If I was retired I would keep 3 years in cash, which would equate to much less than the 80/20 split that they recommend in retirement.

[grantpoll]

I think that "we should always prepare for the worst and hope for the best". Everyone has heard of Murphy's law that anything that can go wrong will go wrong. Most people think of him as a negative guy, but he was actually an optimist and saying that we should be prepared for anything.

Now is the time to cut ALL of your wastes. Pretend that times are VERY VERY difficult. If things get better, then you saved a bunch of money! If things do get worse, you are already prepared. It doesn't mean that you should reduce the quality of your life, but remember that the quality of your life is not dependent on how many times you go eat out. There are simple and cheap pleasures out there!

[mudbug]

I think the one major factor everyone misses in this financial mess is gas prices.
My 401k is a long term investment. With the decline in gas everyone has access to an additional 40 or 50 bucks a week. Grocery store price increases were based on cost of raw materials and freight. My freight cost to grocers doubled in 2008. I am now seeing declines of 25% to 30 % on freight cost. This can be anywhere from .50 to 1.00 per case decline. With less fuel use corn futures for ethanol is declining with corn syrup cost dropping. Corn syrup is a major factor in 1000’s of grocery items including packaging.
Gas price dropped. All items shipped will have a reduced cost.
Based on this I believe we will weather this storm.

[blueskies49]

Originally Posted by grantpoll

I think that "we should always prepare for the worst and hope for the best". Everyone has heard of Murphy's law that anything that can go wrong will go wrong. Most people think of him as a negative guy, but he was actually an optimist and saying that we should be prepared for anything.

Now is the time to cut ALL of your wastes. Pretend that times are VERY VERY difficult. If things get better, then you saved a bunch of money! If things do get worse, you are already prepared. It doesn't mean that you should reduce the quality of your life, but remember that the quality of your life is not dependent on how many times you go eat out. There are simple and cheap pleasures out there!

Good post! I am trying to do the same. And not just because I'm afraid that times may get extremely difficult soon although like a pp said, that may come from me paying too much attention to the financial news. But I've never had much saved because I always went out and spent whatever extra funds came in and I don't have much to show for it. I am on my way to being debt free, though, and that is a very good feeling.

My husband and I work for a construction materials testing lab and the owner of the company is starting to get a little worried about any potential downturn in the economy. I'm not worried about our jobs YET but I would like to be prepared just in case.

[Southern Phoenician]

Corn syrup is a major factor in 1000’s of grocery items including packaging.

Yup!!! My son was put on a special high fructose corn syrup free diet and I an attest that MANY products have corn syrup. It's cheaper than table sugar but from what I read, it's not very healthy for us. Buying less processed foods should reduce the price of groceries (I would hope).

I've been feeling the effects of the economy for a while; my husband has been looking for a job since March. He just got his unemployment benefits extended another 13 weeks, but that'll only carry us through December. The last time we were in this situaton was in 2002 but then we had a decent severance package; this time NOTHING. He has a job opportunity but it's in VA-- that's way too far away. If the job was a 2 hour flight away, we would do it in a heartbeat!

I refuse to look at my 401k; I'm many years away from retirement. I am focusing on figuring out how to keep our head above water without having to dip into savings or sell our assets.

I agree with those who said the media is creating a frenzy. Like today CNN posted an article about the market tumbling and saying "today might be the day everyone throws in the towel". Uh, yeah now that you've said it!

My company's stock is down to $13. We were at $25 before this started. Fortunately, we have a significant amount of cash so hopefully they won't have to do lay-offs.