I found this interesting article that talks about what you should say to your kids about the economic crisis.  It can be an interesting time for parents.  While you are feeling pretty pessimistic about our economy, you don’t want to burden the kids with worries.  On the other hand you want to be honest.  So how do balance honesty and optimism?

While I do believe that you should never burden children with adult problems, kids are smart and perceptive little devils.  They often know more than we expect them to.  If your little ones are showing concerns about the economy then there are ways to ease those fears while still being honest.

Try not to say “We can’t afford that”.  Even in good economic times we should avoid those words.  They aren’t accurate for most scenarios, especially ones that your kids will be involved in.  A more truthful way to say it is “We choose to spend our money on other things”.   Not only is that true, it also conveys the point that choices have consequences, and that we have control over our situation.  If the child pushes you can explain that buying a new car means that you wouldn’t have enough money left over to pay the electric bill.  And what fun is having a new car in the drive way if you don’t have power.

I was at a store one time and there was a candy machine.  A little kid wanted a quarter to put into the machine and the dad said, “No, we can’t affor… We don’t spend our money on things like that.”  I had to smile.  I wanted to go over and commend him, but I thought that would be weird.

Have them help with frugality.  Kids love to be involved.  Tell them you want to plan a family fun night but that you don’t wan to spend any money.  I bet the kids can come up with a half dozen things to do.  I know my daughter can.  We would be dressed up in fancy clothes having a tea party in the backyard, complete with home made cookies.  This is a great time to let them see that you don’t have to spend money to have fun.  Plus, it lets them feel in control of the situation.  They dont’ have to sit back and hope for the best, they can be involved in getting the family through this tough time.

Well, I barely hit the “publish” button on my post about my fears regarding the economy and one of them is realized.  And you guys thought I was being paranoid!  (No, my husband didn’t lose his job… thankfully!)

My husband called me this morning at about 8:30.  Which is strange, not totally out of the question, but strange since his mornings are usually pretty busy.  Before he even says anything I can tell by the background noise that he is outside.  Also strange, it means he wants to talk to me without his co-workers overhearing. All of this oddness makes me think something is up.

We chat for a bit about random stuff and I think ‘oh maybe it’s nothing, he’s just calling to say hi.  Maybe it’s slow over there and he’s bored.’  But then he says “I got some bad news.”  Oh crap! Oh crap! Oh crap!

I’m going to do explain this the best I can, which isn’t very good since I don’t fully understand it myself.  Company A hired Company B to do a job.  Company B hired Company C to actually do the work.  My husband works for Company C but he physically works at Company A’s site.  Does that make sense?  Company A and Company B just recently signed a 5 year contract.  Which is good for us because my husband just gets hired on to which ever Company C happens to be at the moment.  It changes every few years and my husband has to go and interview for his own job again, which he always gets.  While that is kinda scary who is better qualified to do the job than the guy who’s been doing it for the past 15 years?

But I guess part of the work that he does isn’t part of the actual contract.  They just do it.  Well, this section of the work got contracted out to Company D yesterday, because they will do it cheaper.  So that means a big chunk of work that my husband and his three guys no longer have to do.  Which is bad.  It means no overtime. It means they don’t even have enough work for the guys who currently work there.  My husband’s boss said that they will watch it for a month and see how it looks, busy wise.  But my husband doesn’t see how they are going to keep the lowest man on the totem pole.  Which sucks.  Since it’s such a small team they are all pretty close.  It’s actually my husband, his two brothers, and a family friend they have known since they were kids.  It will be sad to see one of our friends get laid off.  It also means that we are that much closer to having it happen to us.  I feel like I’m standing on my front porch during a hurricane, and the flood waters just covered the bottom stair.

There is one small silver lining.  My husband used to work at Company D and the person in charge of this new contract is one of his very good friends.  I’m not sure how that will help us, but it can’t be bad right?

I really haven’t comprehended what exactly the whole “no overtime” thing means.  It’s not good.  I’m not quite ready to go there and figure out just how not good it is.  That is a post for another day.

Ok, I’m just going to suck it up and have a gloom and doom day…

Shopping to beat inflation?  I just read some advice that said to shop now.  Buy stuff now that you know you will need over the next few years.  Buy clothes for the kids, buy food that will keep, buy anything you know you will need because you will get a better return on your money than investing it. Yikes. You will be putting your money in something that is going to go up in price, rather than something that is going down.  Even earning a small percentage on a savings account is still losing money when inflation is high.

Sigh.

Hey guys.  I don’t know if anyone noticed but I didn’t post on Friday like I normally do.  I was hoping a little hiatus from the blog would clear my head and I could think of something other than the state of the economy to write about.  I can’t.

What’s worse is that I really don’t even know what I want to say about it.  I usually try to put a positive spin on things, I take the news with a grain of salt, I try to see the silver lining.  I’ve spent time looking at those looming dark clouds and I just can’t pick it out.  Sometimes I see something kind of shiny and I think “there it is!” but then the light shifts and it disappears again.

I’ve been doing a lot of reading and for the most part I can’t get my head around the situation.  There is quite a bit of uproar about the bailouts.  I’ve already given my thoughts on that topic. But even the proponents of the bailout say that things are still “going to get bad”.

I guess that is my sticking point.  Define “bad”.  What does that mean for the everyday person?  More importantly, what does that mean for me?  Should we cancel our Disneyland trip?  (We’ve decided on January btw.)  Should we sell the truck while we still can?  Should I get a job now, in case I need one later but the unemployment rate is so high that even one opening at Walmart gets 500 applications?  Is my husband’s overtime going to be nonexistent?  Is he going to lose his job?  What is going to happen!?

Out of all those worries, the one I’m most concerned about is my husband’s overtime being cut.  We really depend on him getting a decent amount of overtime, plus it seems like it woud be one of the first things to go.  I don’t know what we will do when/if that happens.  Then of course it depends on how long he is going to go without overtime.  We use our cushion fund when over time is low.  So one, two, three months with none isn’t going to kill us.  But 6 months to a year is going to really be tough.

As far as his job… it’s a safe as any right now.  He’s the boss, so they would have to be closing down his whole site before he would lose his job.  Which may happen I guess, it’s not outside the realm of possibilities I suppose.  It depends on how bad “bad” is.

So what are your worries?  How are you feeling about things right now? Do you have any ideas on how bad “bad” is?  Do you have plans for a worst case scenario?

Pic by: Mike Licht NotionsCapital.com

You don’t want to be a seller with the housing market the way it is today. But if you have found the situation unavoidable, there are some things you can do to make your house more attractive to buyers. The more attractive your house, the quicker it will sell, and the higher the price.

1. Say good bye. You must be emotionally ready to sell your house. All of your energy has to be pointed in the right direction. You’re fighting an up-hill battle here, you can’t afford to have something holding you back. Start looking at your home from a buyer’s point of view.

2. Get rid of your stuff. You want people to be able to see your home, not your stuff. Buyers won’t be able to picture their own stuff in the house if every flat surface is already filled. Make sure you hit the closets, cabinets, the kid’s rooms, the attic, the basement, and the garage. Take away anything you won’t be using before you move. Furniture that is blocking a window or walking path also needs to be taken out of the home. A fully organized and decluttered home makes your home look bigger and allows buyers to see themselves living there.

3. Depersonalize. Buyers don’t want to be reminded of who has been living in what will hopefully be their new house. Family photos and your porcelain rooster collection will make them think about you living in the house, not them.

4. Make repairs. Does your faucet leak? Got some cracked tiles in the bathroom? Fix them. If buyers see small repairs they can only assume that big repairs are just around the corner. Besides, you want buyers leaving your home saying “Wow, that was so nice.” not “Did you see that hole in the wall?”

5. Show off your view. If you have a view, or fireplace, or some other feature that makes your house special, show it off. Think back to when you bought your home. What made you say “wow!”? Make sure you are highlighting those same features.

6. Paint. A fresh coat of paint in neutral color can really go a long way. Don’t forget the outside if it needs it. I heard to paint your front door yellow. My mom swears by this tip. Yellow creates a buying emotion.

7. Stage your home. Make sure that each room has a defined purpose. If you’re using your dining room as your office it’s going to confuse buyers. Is it an office, or a formal dining room? Pick one and stick with it.

8. Clear the walk. Overgrown bushes and clutter are going to scare buyers away. Trim the bushes and sweep the porch while you’re out there. Go ahead and rent a pressure washer if you need to. Then get some cute yellow flowers and put them on the porch.

9. Don’t forget the back yard. After you’ve worked on your curb appeal head around back. Do you need to mow? Has the swing set seen it’s last days? Use the same tactics you used inside to clear clutter and make the back yard more appealing. Maybe even a new patio set is in order.

10. Lower the price. It doesn’t matter how clean and organized your house is if it’s too expensive. If your Realtor suggests lowering the price, you may want to listen. These are tough times. Buyers are looking for steals, a home needs to be below market value to generate interest.

pic by: tromasbronot

On the news last night there was a piece about how well pawn shops are doing right now. I’ve always been curious about which type of business would be best to own during a recession so this story really caught my attention. The news said that people have been pawning luxury items such as cars, jet skis, four wheelers, and RVs. Why does anyone own a jet ski, four wheeler, or RV if they are not financially stable? I know things can happen that you weren’t expecting but if you are pawning your jet ski before we are even officially in a recession then you needed a bigger E-fund. Actually, you shouldn’t have owned that jet ski in the first place. If you are out there and you don’t have an emergency fund but you do own a four-wheeler, a jet ski, or anything of that nature, sell it and sell it now. Take every last dollar you get from that sale and put it in the bank.

I’m not overly familiar with pawn shops so I did some reading. You can either sell your stuff or get a loan on it. You will get a little bit more money if you sell your item but you don’t get it back. If you get a loan on it then they will hold it for you and when you pay back the loan plus interest you can have your stuff back. In one article I read it said that the pawn shop will loan you about one third of the amount that they think they can sell the item for. The example they gave was if something cost $100 new and they can sell that item for $60, they will loan you $20.

In the news piece they mentioned that people are paying a 22% rate on their pawned stuff. That isn’t 22% annually. That is just a straight up 22%. So if you pawn something and receive $100 you have to pay back $122 at the end of the month. If you want to extend the loan you can pay just the $22 and extend the loan for another month.

I couldn’t help but think, can you pawn something that is financed? I looked around and didn’t see anything that said you couldn’t. So it’s possible that a lot of this stuff is already financed, that is pretty scary. If anyone knows for sure please let me know… I’m curious.

Picture by: Inkyhack