Am I Feeling the Recession . . .Or Not?

Despite the doom-and-gloom forecasts we've been hearing in the financial news for months, I've mostly found myself wondering what all the fuss is about. Maybe I'm just lucky, but I think that a series of major decisions I made right around the time the economy was heading south put me in a position to continue living life as usual (if not better in some ways). Here's what I mean.

-A few months ago, I left the nine-to-five world to work from home. As a result, rising gas prices have meant very little to me. My boyfriend's gas expenses have increased, and since our finances are almost combined, it does affect our household somewhat, but with my lack of driving, our overall gas expense has not increased (and I am more than happy to be off the road).

-Increasing food prices? What increasing food prices? I've been making a point to eat what's already in my pantry, fridge and freezer instead of going out and buying whatever strikes my fancy (currently I'm resisting the temptation to run to Whole Foods and buy some lavender honey). These behaviors happen to coincide with things people feeling the pinch would do to save money. I have been doing them to save money too, of course, but it's not that I'm feeling the pinch of the recession, it's that I've been saving all my pennies to buy a house. In the last two months, I've spent less on food than I normally spend in one month. I've also stopped going out to eat, as many do during a recession, but again, that's because a frozen pizza is much cheaper than one from Pizza Hut and I want my house money. The only increase in food prices I've noticed seems like it may be related to my neighborhood grocery store's renovation. News flash to store: Just because your floors are new doesn't mean I want to pay an extra $1.50 for a block of cheese. I've stopped shopping there as a result. Also, I cook more now, but that's because I like to cook and I actually have the time to do it now that I work from home, not because I am feeling poor.

-The housing industry is a mess. This is the golden opportunity I have been actively planning for over the last several years. Don't get me wrong, I was tempted to buy during the housing frenzy--not because I thought I'd get rich, too (I just wanted to live in a place, not flip it), but because I was afraid, as many others were, that I'd be priced out of the market forever. Thankfully, I could not afford property at that time and I did not go to the bank and try to get a loan anyway (in fact, the thought never crossed my mind), but I can now. I'm going to buy a bank-owned property, and I'm also going to get a killer interest rate thanks to the failure of Fannie and Freddie.

-Increased sinning. The sin industries are said to do well in times of recession. The idea is that people cannot afford expensive luxuries, so they buy inexpensive ones instead--a glass of wine here, a fancy chocolate bar there. For me, thriving on affordable luxuries is a way of life, so my habits haven't changed at all in this regard.

-Diversified income stream. Since I am self employed, I have several clients rather than a single employer. My clients are also spread across several industries. This means that if one of my clients gets hit hard and has to lay me off, I will only lose part of my income, not all of it. Same thing if a particular industry gets hit hard--only part of my income should suffer. The flip side is that unlike the average employee, I can't claim unemployment benefits, even if I were to lose all of my clients. And yes, I've been fortunate to have plenty of work, which is a blessing I have not taken for granted.

-Investment returns: My retirement accounts are down 15%. Is this scary? Not really. I just see it as interesting. I don't need that money for a few more decades, and since I'm not selling, my losses are only on paper. In fact, I want to put more money in since the share prices of my mutual funds have taken such a tumble. Now is the time for making the most of dollar cost averaging. Unfortunately, my ability to take advantage of this downturn in the economy is limited since I am about to put all of my money into a house, but I do plan to invest further in the stock market if I have any money to spare after all the renovations are paid for.

If you are feeling the effects of the recession, I'm truly sorry. This is not a "ha ha, I've got it good and you don't" article. My point is that it is possible to set up your life in such a way that you can be relatively sheltered from the effects of a recession, and also that if you live frugally day in and day out, you are less likely to feel the effects of a down economy. Of course, all this doesn't mean that I don't feel nervous too when I hear the analysts saying that this is the worst financial crisis since the Great Depression, but I guess I just have faith that things will work out okay.
Is the recession impacting you? Share your thoughts in the comments.
P.S. I know it's geeky of me, but I'm so excited about the photo in this post--I took it myself in Times Square last week.

1 comment:

Scott, Kim and Jay said...

Amen sista! Being young is a definite positive today!!!!