Recently I polled Rancid Truth blog visitors an important question:
"How would you describe your household budget in 2008?"
From 70 responses.....not exactly a huge scientific sampling, I realize, but.... these are the findings:
"Spending More Than Ever Before" = 1% (Thank you, Warren Buffet!)
"Making Moderate Spending Cuts" = 32%
"No major changes in spending compared to 2007 budget" = 20%
"Making drastic spending cuts" = 17%
"Struggling to make ends meet" = 5%
"I'm oh so screwed!" = 21%
An estimated 69 out of 70 are making some effort to scale back their spending.
Not good news for an economy that is fueled by high-octane, no-holds-barred consumerism and easy credit.
Interestingly, 15 respondents (20% of the sample) identify themselves as being "screwed" or shall we say "financially in a heap of trouble".
Now, I am not completely naive. Perhaps some of these same 15 respondants aren't actually describing themselves, but rather people they know, or perhaps people they really wish were "oh so screwed" financially. Schadenfreude runs rampant on housing crash blogs. I know. I'm often the one fanning the flames. Still, you only get to vote once on these blogpolls, so I'd like to believe that most readers make their own opinions count.
One other big takeaway is that a good number of respondents aren't really changing anything they're doing financially. A recession might be on it's way, or already here, but it isn't going to deter them from carrying on with life as normal.
Personally I selected item 2: "Making moderate spending cuts". I never spend very much money in the first place, but there are things I don't need to spend money on, and plenty of things and projects I can defer until much later in the year. I have no debt. No loans. But as a renter I have no "wealth-building" house either. (These new NAR commercials make me sick to my stomach. You gotta have balls of brass to....oh, nevermind.). My car is a 6 year old rice grinder. So do I fit the profile yet?
I sort of started in August. I've cut down on eating out. I'm planning trips with the car and grocery lists more carefully. And it's much better to drive my motorcycle to work every day now with gasoline in southern Cal at $3freaking51 per gallon! As long as I can avoid OC's finest SUV-driving maniacs for the 15 minute morning and evening commute, it's all good. And how can you beat 54 miles per gallon? Jesus, everyone should be on a motorcycle or moped right now. Let's turn Orange County into Bangkok or Beijing (sans all the air pollution, of course).
Back to the blogpoll, I do agree that revising the family household budget is a wise move even when times are good. It's even more important to review when financial times are less certain. As for those who can't make ends meet or feel "financially oh so screwed", there are people that can help. Talk to people you trust and get the help you need. Don't wait.