Tuesday, September 30, 2008

Life With Chicken Little

It’s all my grandfather’s fault -- his distrust of banks, his disdain for the stock market. It was all well-founded.

During “the Crash” way back when, in the days before the FDIC, Young Tom lost $2,000 - $3,000 that he had in the bank. That was money he had scrimped and saved for years while trying to help support seven younger siblings.

He never got over it. Can you blame him? That’s still a chunk of change today, at least to lose anyway. Back then though, it was enough to buy a house. Oh, he eventually did have a checking account. But there was never more than a $1 or $2 above what was needed to pay bills. Never.

I’m explaining all this to preface “the sky is falling” scenario that the mother currently is enveloped by. Her Young Tom genes are all aflame. She’s freaking out about my job, my credit, the money we have in the bank, the level of gas in the car, and the amount of food in the house. She’s convinced that we’ll never be able to finish the house now. That new car we’ve been talking about for so long? Forget it.

I can allay a few of those fears. I can go fill up the car. I can go buy groceries. I have no control over whether the bank (which is on a target list) will get swallowed up, but I guess I can always follow Young Tom’s example and leave only enough in the account for checks to clear. But if enough people do that, won’t that close the bank for sure?

As for my credit, if my limits suddenly disappear it will bitch-slap my FICO. Unless I pay off my balances now (which I’m not in a position to do) that’s probably what will happen. So, my credit rating will likely plunge like the Dow. I’m powerless to do anything about it.

As for my job, if I’m suddenly shown the door (not that I anticipate that I will be, but anything is possible anymore) what can I do? Refuse to leave? No. I’ll just have to find another one. Or two. Or maybe three to keep things going at their present level.

But no matter what, it’s going to do absolutely no good to freak out. I’ve spent the second half of my life trying to dispel the “expect the worst” mentality that was ingrained during the first half. Dwell enough on the negative and it will run to you – at top speed.

Not that I’m not stressed. It’s almost impossible not to be. It would seem that our country is going to hell – without the benefit of a handbasket. Even so, I’m trying to manage it. Not lose my cool. Not log onto my tiny 401K which, by now, is likely non-existent.

No. I’m finding comfort in small things. Like the newsletter I got from Tim Carter at Ask the Builder. Tim cites a USA Today article from yesterday that says “the economic woes are nothing close to the Great Depression, even if it feels that way to some. We're nowhere near the days of wandering homelessness evoked in John Steinbeck's 1939 Pulitzer Prize-winning novel, The Grapes of Wrath.”

Well, that’s some good news. So, is the sky falling at your house?


Anonymous said...

The sky is always falling at our house, but that doesn't mean it's always finances... ;)

Our poor area though. I counted 8 empty houses on my street yesterday. Foreclosures like crazy in AZ. Too many investors bought homes to flip, then tried renting them, and are now losing the homes. Very sad, and frustrating. I would like some neighbors again!

MonkeyGirl said...

I feel for you because I know the feeling. I keep trying to tell myself that my 401k is for the long haul and try not to even think about how much money I've lost in the last year!

Jayne said...

I second MonkeyGirl. I just try not to think about the retirement account. I have a friend, an older man, who cashes his checks immediately and keeps the money in a coffee can nailed to the floor in an undisclosed location in his house. He doesn't "believe in" banks or credit. Sometimes I think he has the right idea. Sigh.

Dee said...

Nope, no sky falling chez moi. (Good thing, because I really need a new roof.) I got all shook up back when the dot-com bubble burst, but we made it through that, and I learned a lot.

Monkeygirl and Jayne: you haven't "lost" anything unless you sell now. As everyone keeps telling you, DON'T SELL NOW! You never actually "had" that money - you had a portfolio that would have been worth that much on whatever particular day you looked at it, that's all.

I'm sure your advisors are also telling you that your reinvested dividends are buying more shares, while the market is down. This will pay off when it bounces back: instead of, say, six shares of Apple, you'll have sixteen. This is a GOOD thing.

My personality type in general is categorized as "Blithely Unworried" - can you tell? I see dire predictions of "worse than the Great Depression" and I think, well, okay, so I live on ramen noodles. Or I don't live at all. Yet another adventure!

There are many many houses up for sale in my area too. I don't know the stories behind them. I would hate to lose my own home, but even that wouldn't be the end of the world.

NV, I think This D*mn House is paid off, yes? So what worries do you have about credit? Home Depot might cut you off?

Frankly, I don't understand the bailout, nor do I understand the Fed suddenly releasing gazillions of $$ of new currency. It seems to me that this is "borrowing" even more money from our descendants, running insane deficits, and for what? *scratches head*

I am glad for the FDIC. Only I don't think my 401(k) is covered by the FDIC, and naturally that's the only real savings account I have. Oh well! It's just paper ...

NV said...

kspin - Funny! Yeah, there are for sale signs all over the place, but few are vacant at least.

MG -- Yep. put out of mind.

Jayne -- Sounds a lot like Young Tom was. :-)

Dee/KayO -- Your credit score matters -- a lot. If the banks drop my credit limits, I'll be near max. That will damage my score, and by more than it used to, too. And while the house is paid for, that also works AGAINST my score. (Wish someone would explain THAT one to me. Paid off my house and took a 30-point hit!) I would like to buy a car at a reasonable interest rate someday. That's biggest reason for now why credit matters.

Dee said...

Aw, come on, look on the bright side: if you don't have a job, you won't need the car!

Vicki said...

We're feeling it with the higher food and gas prices. We're watching our investments, but we're (me) trying not to freak out and pull all our money out. Since my husband has the type job he does I'm not worried about him losing it...but you're never 100% certain. To me the sky isn't falling, but the media sure does want us to think that way.

I was thinking today as I was driving around, looking at the different stores and houses, an wondering what our society would look like if none of us lived on credit. Our society is driven by it...

Why S? said...

I'm with Tom. I've never trusted the entire financial system thus I have no investments to lose. Even so, I still feel anxious. Today I actually feel physically ill from it. But I think it's just the insecurity of not knowing what the coming year will look like. It's a hard pill to swallow but this might be what we all need to be a better country in the long run. We were all getting a little fat and mentally lazy. Maybe not all of us, but a lot.

NV said...

Dee/KayO -- The job and the car right now have nothing to do with each other. I only drive to work 10 percent or less of the time. Now, the job becomes VERY important when talking about getting a new car ...

V -- yep. I think everyone is seeing it. I know new utility rates just started Oct. 1 (10 percent minimum hike) and water just went up 20 percent. And the mother's supp. health is going up 30 percent in January. Ouch!

why -- I trust them even less these days! Still thinking that ole coffee can doesn't sound too bad!

Anonymous said...