What is your best set of tactics for weathering the current economic crisis?

My tactics revolve around keeping my head down and living beneath my means. We are already retired so we are using our retirement money now. Fortunately, our employers have good investment counselors so our income has remained the same.

@marina – good question!

My husband took on a different partner, instead of the non-committal partner he had before, that alleviated some of his business debt.

We are making strong efforts to not add new bills, cut out the things we truly do not need. We adjusted our phone plans, driving habits and just are watching how we spend.

Between the two of us, my husband has a side business and a “regular” job. I am self-employed. The one seeing the most impact is his side business, restoring older cars and regular mechanic work. The money going into restoration is slowing down, that’s expected, though. What makes us nervous is his regular job – that is where our main insurance benefits are – we do have secondary policies; however, they aren’t as strong as his group policy. Without the combination of the two, my medical costs would have a very strong impact on our family.

Oh and part two is getting rid of debt. No more mortgage or car payment for us!

My husband got laid off on January 23rd. Since I’ve been a stay-at-home mother for years, that means no income, no company vehicle, and no health insurance. We are both scrambling to find a job, with no luck so far. He is collecting un-employment right now, (which is not much, even at the highest payout allowable). We cashed in a small 401k (our only savings) to help tide us over. My doctor’s office has given me all the free samples they could of my daily medications, and I got an antibiotic filled for free. We canceled Merry Maids (our only indulgence) long ago, cut our cable bill (and will soon cut it even more), cut our grocery bill, drastically reduced getting take-out food, fill up my gas tank when I’m in another town (10 cents/gallon cheaper), no car washes, no salon haircuts. The only saving grace we have is the fact that we own our house, not the bank.

I’m in college, working a meaningless restaurant job and peering worriedly at the disaster of a “real world” waiting for me on the other side of Graduation this May. I (and many of my friends) were hoping to take a year or 2 off before heading into graduate school, but since we have realized that the job market and economy are going to be in no shape to help us when we graduate most of us are just continuing in school. Yes, it’s racking up more bills in the long run, but we’re hoping by the time we finish that round of school the economy will have stabilized into a place where we can maybe start careers.

So far, I still have my job, but there have been major layoffs where I work with more to come.
My son has been out of work for an extended amount of time. My other son is working part time and glad to have that his wife was laid off a while ago.
They have run out of unemployment benefits and none of the the three have health benefits. I’ve been helping out with dentist and eye doctor for them, and helping with other bills when I can. Job opportunities in our area are non existant.

We have always been very frugal so we haven’t made any drastic changes. We could get stripped down to subsistance living (only food, gas, electric, medical, etc.) but that isn’t necessary at this time.

My work situation is not effected by the economy.

My husband’s on the other hand…he is in the construction industry. Fortunately he has positioned himself to be one of the last to be let go from his employer should work slow down. Luckily, this hasn’t happened.

As far as investing, we are still contributing to our retirement accounts but aren’t buying anything as, sadly, I don’t think we (as a country) have hit bottom yet….I think the dominoes are still falling.

I echo Snoopy in reverse, my wife works…., also I draw SS.

Most always lived frugally, have had moments when times were better that we splurged.

We have no payments, own our home and vehicles, invested cautiously so drop did not affect us but because of the caution we had less to begin with.

Preparation for future: plan to add solar heating capacity to the house this summer, possibly a wind generating electrical system that would provide us minimal power. We stockpile dry goods and necessary hardware for repair / maintaining house, cars, yard, purchase 80% of groceries on sale, search the internet for the best deal on nearly everything but grub.

We presently buy only what we need to live comfortably. I have a 1 acre garden, freeze and dry veggies. I plan to invest in the stock market with caution.

I think a bushel of wheat and a gallon of water will be worth more than a bushel of gold someday. I am gathering tools and the knowledge to be a pioneer, totally off grid.

Like Snoopy, I am of the opinion that it will get worse, sure would be nice to know how much. I’m gonna hate it if I lose my internet, dang! But.. will have a roof overhead and a full belly no matter what, and I thank the Lord for that.

We’ve stopped all non-essential buying. I’ve been selling merchandise on eBay (extra money—whoo-hoo!). We moved our five-year-old from a private school ($500 a month!) to a good-quality public school (free, albeit with lots of mandatory fund-raisers). We eat vegetarian once or twice a week, with one of those nights being a beans-and-rice night (with homemade cornbread, it’s not so bad). And we are actually completely eating up our leftovers (we used to view them with condescension—now we look at them as eating opportunities).

We make trips to the local library once or twice a month to borrow books rather than buying them (who needs the clutter anyway?), and have found it fun to go online, check the catalog of books available, and put a desired book on hold. When they get it, you get an e-mail. All you have to do is swoop in and pick it up. Renewals on-line make it all easy, too.

Lastly, we own a small shack in the mountains of NC (across the country from where we live), and we have been gloriously forgiving of the current tenants, who pay the rent intermittently at best, because we know a bird in the hand adage to be true (their rent money helps us pay our property taxes in California—we are grateful for that). Whew. These have been painless changes that we have consciously made (so far, painless).

We have apartments and have noticed that our more affordable apartments are now being rented to better qualified people. People who used to rent a much more expensive apartment are now deciding that if they choose a more modest apartment they can save a lot of money on rent, get their credit cards paid off and maybe save a bit in case they loose their job.
Our more expensive apartments are just now starting to show signs of struggle, but I have noticed that the MOST expensive apartments in the market (not mine thank goodness) are offering crazy move in incentives to get people in.

Like a lot of people, we’ve been living frugally for a while, but the downturn makes it necessary instead of a kind of hobby.

We both own our vehicles outright (even if they are from the mid ‘90s), so no car payments. We carpool to work (plus, it’s only a five mile commute). My husband watches the stock market like a hawk, endlessly calculating where to position the 401(k) and IRAs, and as a result we are not down as much as the market as a whole has been. We buy food in bulk and/or on sale and clothes on sale or from the resale shop when we can.

What is killer is the mortgage payment, but we live in a co-op that is soon becoming a condo association, which will lower the payments a bit and raise the resale value. (Hopefully in a few years we’ll be able to sell and buy a cheaper place, with a yard for a garden.) What’s helping is that our employer has some foresight and is well-positioned to ride out 2009, so they don’t think they’ll have to make any personnal cuts. Fingers are crossed all around.

It’s a sad thing, because the more people cut back, the less demand there is, and the more business shuts down, laying off more people. We should maintain our old spending, but this is almost impossible to do since everyone wants to prepare for the worst.

Owning your own home is good, since you don’t have to make payments on it, but if you want to take value back out of it, I wonder if that’s possible. Who wants to buy a home these days? Buyers are really lowballing on houses, hoping people are desperate enough to take a fire sale price.

We never borrowed more than we needed (just the house and a credit card). We always paid off the credit card in full every month. We bought our car with cash. I’m glad we have very few debts (house paid off in May, hooray!) But the 401Ks have dropped by half in value. Where will college funds come from? When will we be able to retire? We worked hard to save as much as we could, and now we’d be better off if we’d put it all under a mattress.

My only hope, is that when things turn around, they will take off because everyone comes pouring back into the market. I keep thinking about my grandparents teen-hood in the Great Depression. I remember what it did to them, and how frugal they became, and how they passed that message on to my parents, and thence, onto me.

Really, really scary.

@daloon ;Wow! Either you are very atypical for bi-polar or you have a very very strong wife who keeps you in check! Usually financial irresponsibility goes along with bi-polar. Hearing you say that gives me a little hope for my son!

@Judi : Interesting, I’m bipolar and frugal also, in my younger days I was known to save for a year then splurge. That’s related behavior now that you think about it for me.

Got over that about middle age, and started getting ready for this. Sure hope I’m ready anyway, gonna be a wild ride.

“Owning your own home is good, since you don’t have to make payments on it, but if you want to take value back out of it, I wonder if that’s possible.”

I bought my home because I wanted to live in a place where I could change things without written permission from the landlord, could have pets without having to pay a huge deposit or pretend they don’t exist, and could know I would never be evicted because I didn’t own it. I really didn’t buy it as an investment, certainly not a short-term one. I’ve owned it for 16 years, and figure if all goes well I will live in it another 20 or so years before wanting to sell it.

@Darwin: You didn’t mention this, but another way to get value back out of it is to mortgage it again. Mortgage rates are low, and there isn’t much money available, so they might value the house quite low, limiting the amount of money we could borrow on the house.

@judi: don’t forget, I didn’t become bipolar until two years ago. Also, I was brought up in a New England Calvinist atmosphere. I know that one symptom of the disorder is profligate spending, but that’s for people with Bipolar I (I think). I have Bipolar II, and my mania was very mild. It was the depression that whacked me hard.

Having said that, I do think that one reason why I was able to survive this more easily than most is my education. I could understand and, more importantly, believe what the shrink said, and I was compliant with my meds from day one. I think I’ve forgotten to take them only one day in this entire time.

However, I do believe that the more education you have, the better you can cope with this disorder. If you train him well on saving behavior now, it may really help. I have to start with my daughter now, but I think she understands saving already, because she is fairly responsible (although I’m a little concerned about some things she says on Facebook. Maybe I’ll ask a question.)

@daloon – OTOH I can do something else with the money I would be paying the interest with, even if it is a relatively low rate. We no longer are able to itemize deductions in part because we no longer have a mortgage, but they have also raised the exemptions so only a mortgage with a relatively high interest rate would do us any good there.

@Darwin: There is that. And believe me, we are looking forward to the cessation of mortgage payments. Of course, that money is already earmarked for education. Sigh.

Lotto, lotto, lotto.