Well, it's your money. Ok, "reasonable" for me is $40K or so (two years mortgage + taxes and some fun money). OTOH, Dave Ramsey tells us 3-6 months expenses. Everyones "needs" are different.
Yes, there are (way too many) people living on the brink of disaster. They're usually the ones with all the toys in the front yard, so they're not asking how much is "reasonable" to spend on toys. *Borrowing* for toys wasn't part of the equation.
Yes, this is a shred of a silver lining. I more conservatism comes back into our lives.
My father, a uni professor, died when I was 12 and my mother had always been a stay-at-home, so there was a pretty big change in our lifestyle, then. They were young adults during the depression so had that mentality. She did fine with little. The house was almost paid for (seven years into a ten-year mortgage) so that was no issue. Cash flow wasn't great, though.
I'm not a cheap SOB, at all. I just don't borrow money I can't pay back easily; like you, BTDT. I've already retired from one job (took a buy-out) and supplement that retirement with another job paying pretty much the same, in a state with half the income taxes and a quarter of the property tax. It can be done and I found it's not nearly as scary on the outside as I thought it would be. "Retireing" was by far the best thing that happened to me (in the last 39 years - SWMBO may be listening).
I think this recession is proving that 3-6 months is probably not going to cut it. I know some people in their 50's that are in some pretty dire circumstances right now, and they had that the mythical "three months of mortgage payments" socked away, just like all the newspaper articles told them to. But as the Bard says "When sorrows come they come not as single spies but in batallions" and that's exactly what happened. Job woes easily translate into health woes because the stress level shoots up. Going on interviews every week with not even a nibble can spiritually gut someone.
I've been hiring a friend I've known since college to do odd jobs because he's that hard-up for money. After he lost his job (his World Bank job was outsourced) his wife divorced him and then he was diagnosed with prostate cancer (after deciding he couldn't afford COBRA). Once you're in the system as a "sick person" no one will hire you lest their group premiums soar. Fortunately, his kids are chipping in to help him, but times really got tough for him is a big hurry. If people can live without having a constant knot in their stomach with only 3 months of expenses in the bank, more power to them, but I think they're deceiving themselves.
Every expense we've budgeted for has gone up way more than any projections would have indicated. From gasoline to electricity to food to utilities to taxes to maintenance, etc. As governments run out of money, they're just going to ratchet up the tax and fee screws. I predict that by November, with employment rates still plummeting, the experts will declare that this the new norm, that it's structural, not temporary and we had just better get used to it.
Or, they sucked out the equity they had built up in their homes with a handy-dandy reverse mortgage. They didn't see it as borrowing but almost as free money, there for the tapping into.
I agree, to a point. That's why I have at least two years' mortgage payments in the bank. With any luck I won't need that much in three, because it'll be paid. The down side is that that money isn't making any money and is, in fact, losing ground.
Interviews aren't stressful at all, at least I have never felt them to be. I rather like interviewing. NEEDING the job to eat is stressful.
Would that everyone had three. It hasn't been that long since I was in that boat.
They already have (declared this the new norm)! Of course it just proves how clueless our current crop of politicians *AND* bureaucrats is.
Same thing. The *only* time I've ever "sucked" money out of a house was to add to it. What I added was worth more than the money. Unfortunately, the only major employer in the area got rid of 20K employees over three years. That put a big crimp in the property values. When I sold I still was above water, but not by much.
ALL conservatism. It all fits together. There is good reason things worked.
Some already had. I can remember when unemployment went under 6%, what was then "structural" or "frictional" unemployment, that inflation was going to break out. I would be really surprised if we ever get back to mid-00's structural unemployment ever again. Too many one-of-kind happenings then from (too?) easy money from the Fed, to great leaps in productivity from computer adoptions, etc. to suspect that the halcyon days will ever return in full force, especially with all the other stuff going with health care, etc. I'll be happy if we manage to miss out on our equivalent of Japan's lost decade.
I looked into it a couple of times and I could never find an investment that I could live with that paid enough more in interest over what I would have had to pay on the mortgage to make it seem worthwhile.
That's not the issue. I want the money in hand not because it's better invested than paying the mortgage down, rather as security to be sure I can pay the mortgage. The problem is that I have to pay for the privilege of having someone hold my money. That's what I don't like. Though, the mortgage is 4.5% so they're not making out like bandits either.
Actually it was the other way around. The Natives were getting restless so the Government decided that health care benefits (and I don't think they were ever completely free, just subsidized) were not REALLY against wage freeze. BTW: This is about 90% of the reason we are in the general healthcare mess we are in today.
FWIW his is the second biggest deduction. The first being the employee healthcare deduction.
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