Friday, February 6, 2009

How to survive your personal economic recession

I'm sort of an expert on this topic, this being at least my second major personal economic downturn. I learned plenty on the first round and have enjoyed using that knowledge this time. Well... "enjoyed" is over-stating it, but it's been "interesting" to apply what I so painfully learned before.

In 2001, weeks before our daughter was born, Huck was laid off of his high paying though dangerous union job at the docks. He gained rank only because people above him had, actually, DIED on the job. (Amazingly, our current landlord bought this farm with money he earned working the VERY SAME JOB for the same company!) I wasn't too upset about the lay off. Timing sucked however, as the dot com bust made it impossible for either of us to find work. There was a series of unfortunate events, as they say. It was really really bad. And it fundamentally changed the way I approach the world. I can actually remember the moment it changed. In a borrowed, literally EXPLODING truck, at the zenith of the West Seattle bridge, in the middle of the night.

We all know there's much that happens to us in life over which we have little control. Economic downturns being one of them. The trick is to find what you do have control over.

The main key here is: AWARENESS. Looking back, some of the disasters that happened in the 2001 financial fiasco could have been avoided with some awareness:

1) just because you've been promised a small but significant trust fund yearly doesn't mean you can count on it. The only money you can rely on is what is in your hand. If you didn't earn it, don't budget it in.

2) look ahead. If your expenditures exceed your monthly earnings more than 25% of the time, you really need fix that. What's in the bank will only last you so long. So plan ahead and make sure your balance sheet is sustainable in the long run.

3) make changes. If your rent is too high, but you can manage it, then you need to understand that at some point, you're not going to be able to manage it. Just f-ing move already. Why wait until you fail to make the rent two months in a row? (photo is of moving box and kids)

4) if you own a house, a car, a fancy stereo, fancy furniture, etc, just sell it before it gets repo'd. This way you at least have a chance of not losing EVERYTHING. (FYI: didn't actually happen to us, but I've seen it, a lot).

5) Change your values. If you value money and flash, then when you don't have it you'll feel miserable and humiliated. But if you value, and I mean HIGHLY value, living within your means, then you'll feel very proud to say, "I can't afford that," and "I'm not going out to eat tonight, or any night in the near future," and "I'm going to continue driving this running, but humiliatingly hideous granny-meth-mobile, because it's paid for." Instead of feeling like shame, it will feel wonderful. This trick requires ignoring the entire culture around you. But I'm not very amazing and I can do it. So can you.

6) If you are in denial about your finances, then there is a part of you that knows you're in trouble. Do not remain in denial. Denial is the final nail in your financial coffin. Do not be like those bourgeoisie who maintained servants and maids until the very second they got evicted on to the street. Just wash you're own damn dishes and rent out the basement.

7) Get all the help you need. Our society has a pact that we try not to let each other down, too much. And we have bureaucratized this pact into social services: food stamps, and in some states, low income health care. Take advantage of these things. Remember that you have already paid for this with your taxes and some day you will again. Don't complain about taxes if you pay them. I look forward to the day when I make enough money to actually be taxed.

8) Don't be embarrassed. Money is not self worth. Everyone hits bad times. But when the good times roll around, don't be a fool again. Bad times WILL return and next time you can be a little more prepared.

Although, this time around, our personal economic downturn hasn't been fun or easy, it was made much less painful by following these rules. Hence, we moved. We've cut out expenses. We got food stamps again. And I haven't been too embarrassed. Especially now that everyone knows we're in a recession. Scaling back definitely sucks, but it doesn't have to be a disaster or a tragedy if you stay ahead of the waves of suck-i-ness.

At first, people kept marveling, "Oh, he seems so bright, why can't he get a job?!" And now that they've dated the recession back to the very day Huck started looking for work, everyone has been much more sympathetic. 300 resumes. 3 large binders of job search. And one really crappy haircut.

And yet the instincts are sure: it was right to sell the house, it was right to leave that other "job", and I'm right to not get work now. (Photo to right is of King Louis, a cat that doesn't understand the history of cats and rocking chairs, and yet he still has his tail. That's an analogy. List the ways we are like him: st __ p __ d).

It's not going to be all doom and gloom forever. Stay tuned, because there's good news coming.

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