Stay On The Job And Defer Nonessential Spending
Sat Nov 22, 2008, 11:22 am | Leave Comment
There in an article Stay on the job. Defer spending by Janet Novack and Ashlea Ebeling on Forbes.com. The article is dated August 8, 2008 in which they tell a story of a couple, a husband and wife team, both just barely turned 60, were doing great when they bought their waterfront house.
Apparently, they both quit their jobs thinking that bad times could never happen to them. The story goes that they bought a few things for their comfort – a boat, their house ($1 million 4,335-square-foot), sank some money in renovation, etc. etc.
They cannot sell their house now. They found they didn’t enjoy small-town life as much as they expected and, after their portfolio tanked, didn’t want to spend so much on housing. “We swung the pendulum a little too far,” the husband says.
They’re asking $874,900 and are open to a rent-to-buy deal. “We’re stuck,” he says. “If we have to stay here another year, I won’t be happy.” Their situation is not your usual hard-luck story – they have a low-six-figure income, thanks in part to her royalties from a test she created. “But they’re not unusual in deciding to work more, spend less and take a new look at the allocation of their investments.”
The last statement is worth noting. Forget retirement, work more, spend less and if you have invested some money, take a good hard look at the allocation of your investments.
Folks of all ages are hurting, of course. But the experts tell us that in theory, the market downturn could work to the advantage of those 45 and younger, with decades to go before retirement – if they keep buying stocks now on the cheap.
So the moral of the story is it’s not surprising that those in their 50s and 60s are the most likely to be hastily rewriting their plans. The article further gives some suggestions of what to do and what moves to consider.
- Work longer
People in their 50s and 60s, even before this economic hardships to say the least, had planned to work longer. Before it was a choice. Now it is survival.
- Spend less
For some Americans if not most, this is going to be the hardest part. The government will tell you to spend, spend, spend. That’s good for the overall economy. But we must spend with our minds and not with our hearts. We must quit spending on the spur of the moment. Some economists call it impulse buying.Personally, I don’t see anything wrong with spending but spend within reasons. Fulfill your needs first. If people keep on spending like there is no tomorrow, then when they experience hardships, they have to be ready for that. They must not, then, complain.
Read the article on Forbes.com in full: Stay on the job. Defer spending by Janet Novack and Ashlea Ebeling on Forbes.com.
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