What has our quest for more gotten us? Do we have ‘more’ than ever before, or have we ended up with less?
In America, the first 7 or so years of the decade brought a great deal of growth and wealth in our economy. Property values were appreciating, unemployment was at low rates, we were all enjoying the ‘good life’. Many went to college and got their 4 year degrees, taking out student loans looking to be repaid once they entered the workforce.
The Housing Industry Crisis
As a new mortgage officer entering the business in fall of 2006, I came in just in time to see the downfall of the housing industry. I saw people who were able to borrow and buy a house that would require a monthly payment of 60% of their PRE-TAX dollars. I saw people who were refinance ‘happy’ and eager to pull out all the cash value their house had gained, borrowing up to 100% of the value of their home. Many times, they were doing this to payoff credit card debt they had accumulated or to take a lavish vacation. After all, they could afford the monthly mortgage payment!
Eventually the whole chain of events began, Wall Street, layoffs, housing sales declined, and it became a vicious cycle. And people were paddling like crazy to stay above water.
In our quest for more, we put ourselves in a precarious position. Before the ‘recession’ began, Americans were consistently spending 106% of what they earned. How is that possible, to spend more than you make? By using credit. By charging, by borrowing. It also means they were not SAVING any money. And when their jobs disappeared, they were in trouble.
Also, as housing values fell, many people were in houses with mortgages that ended up upside-down, owing more than the house was worth. Early on, banks were attempting to get homeowners to refinance at a higher riskier rate, or to come up with the ‘extra’ amount that they were over the value of the home. Even though our situation was better than most, we had a home equity line of credit that was not maxed out, thank goodness, but the bank reduced it by 20%, because they said our house value had depreciated.
Spending, Good or Bad?
Since the recession has come and hung around longer than any of us had hoped, now Americans are spending about 96% of their income. What does this mean? We are actually spending less than we make. We are not borrowing, we are SAVING. What a unique concept.
Now, there is a delicate balance here, one I don’t completely get and I am not an economist, but evidentally Americans saving is BAD for the economy, whereas Americans spending is GOOD for the economy. The catch 22 is that saving is GOOD for the American family, and spending beyond our means contributed to this whole mess in the first place.
So, have we learned anything from the recession? I’d like to think so. I think that family’s are reassessing what is really important. A $20k minivan will work just as well as a $50k prestigious SUV.
We don’t have to have the latest and the greatest to be happy. We can take our kids to the park and run and play and bike with them. Forgoing the extravagant Disney vacation for a smaller quieter vacation close to home at a beach or lake.
The Most Important Things in Life are FREE!
You see, the important things in life are not things after all, they are PEOPLE. They are those in our towns and communities that need someone in their life to reach out and befriend them. Relationships matter!
When the resources are not there for buying and spending and financing expensive activities, families and couples, and groups of friends find that there are much less expensive ways of entertaining, and they usually involve human interaction. We are spending more time in our backyards, playing family games, hanging out with friends.
Shopping, which was the great American pastime for so, many has lost its glamour, as we see how unimportant ‘things’ are. Many are turning back to what our ‘original’ forms of entertainment were- spending time in nature, enjoying the beauty that God has given us, no matter what area we live, whether it is the deserts of Arizona, the beaches of Virginia, the Rockies in the west or the marshes in Florida.
Recovery?
We all hope and pray that the economy will turn around and pick up soon, and that people will be working again. It will take a long time for America to recover, especially the housing market. I also hope and pray that the lessons we learned during this time, that things don’t matter, but people do, will not be forgotten. That even when we have more disposable income, we don’t waste it, that we use it wisely, and that we continue to build and cherish the relationships that we have built.
Disclaimer– I know that I basically lumped all Americans together in this post. I do know that there are many who did try to do the right things. I am not throwing darts at anyone. My goal is that we ALL learn something from this mess!
If you would like to share how the recession has changed your outlook on life, and changes you have made, I would love to hear them!
My goal is to help as many women as possible with these issues we all deal with! Be sure to subscribe via email or RSS so you don’t miss any posts! If you know of someone who would benefit from the info in this post and in my blog and you would like to share with them, please click on the appropriate link below!
Resources for Simple Living
Love Life not Stuff
Slow Down and Enjoy Relationships
How to Live a Better Life with Less
I like your blog (and writing style) and especially your thought people being the most important part of life. I believe our relationships are very precious, which I also suggest to my readers.
I’d love your reaction to my blog and your readers may find it thought provoking as well. It’s about developing and living a more fulfilling and meaningful life. You can read it at: http://findfulfillflourish.wordpress.com/
Steve
Hi Bernice!
What a great post…so true…I love reading your posts.
I know have to work full-time to make ends meet. Something that I do not like as I would love to be able to stay home and do the Mom thing…but that is not possible right now! 😦
Hope you are doing well and may you have a really great Sunday!!
Hug,
Java
Thanks Java!
I did the mom thing for a long while, then back to work, and now back at home, but not by choice necessarily!. Having to find the right balance for me, which is what we ALL have to do!
Had a great family day yesterday!
Thanks for dropping by!
Bernice
divine……always nice posts……
Spending is good…..pending is bad……
earn and spend…..good……
spend and earn……bad…….
wisdom……..
one quarter of earning on…….living quarter…..rent or installment..
one quarter of earning on……..food quarter……kitchen and household……
one quarter of earning on……future of children…education…travel ….
one quarter of earning on……saving in bank….investments etc….
manage in the budget……..never buy on credits or outside the budgeted allocation……no pending credit cards payment……
the best things in life are not the things…..happiness is one of the best…..
Absolutely! We must balance our spending on the right things in our lives to reduce the stress that can come with imbalance. Balance opens the doorway to happiness.
Thanks for coming by….
Bernice
great post! loved ram0singhal’s comment, i second that!!!
This is the 4th post I have read of your today. I love them all, so far. I see so many mistakes other people have made that I don’t want to make the same mistakes as they have. I am taking this economy for what it’s worth. What I have learned is patience with myself and my situation. Just like this economy it will take time to get better.
I think we all need to learn to be patient with this economy. Not sure of your age, Jessica, but this current generation of college age and young adults are going to have a much different road than 15-20 years ago.
Thanks for coming by! I am glad you enjoyed my blog!
Bernice
very informative post
I think we’ve just cut back on Spending. Esepcially since the laborers union went on strike this summer. WHat were they thinking!!
Very informative post.
Following from the SITS
Rated you on networked blogs 5 stars and came by to leave a comment. HOPE you’ll do the same for me
http://nightowlmama.blogspot.com
I was always very sad to see friends and relatives refinancing like the money they was taking was guaranteed theirs…. now many are in a state with homes being worth way below the loands and some have lost their homes…. The government can be blamed for promoting it but the people need to take some wrap for being so stupid…. Surely we could all see it was a bad idea at the time!
how the recession has changed your outlook on life, and changes you have made…
What a question! I would love to share details – but I’m not sure it’s 1)wise, or 2)that my heart would be up for the vulnerability…
We are a super conservative family. We are paying off old “younger days” debt – but currently do not spend one red penny on credit – at all! We live totally liquid. I do drive a minivan – that doesn’t have all the bells & whistles – leather, sunroof, auto-everything. I go to the park with sandwiches made from home – koolaid in a thermos. The last real fancy vacation was our honeymoon (8 years ago)!
My husband is a Pastor. He recently got called to a church in a different state. We faithfully followed God’s calling to this new & unfamiliar place. That was a year & a half ago and we STILL have not sold our other house. Also, our new church is struggling to understand what it truly means to tithe! So between 2 houses, and small tithes (i.e., my husband’s salary) – we are facing the worst. Next week our other house will no longer be a concern (you know what I mean – can’t type that word). We are only renting in our new place.
While I have to explain to my daughter why she cannot take dance, and my son cannot go to Pre-K, we are doing our best to serve the Lord ardently!
That’s obviously how it has affected us. How has it changed us? Honestly I’m being challenged to trust the Lord is faithful even when I can’t see His hand! I know He is good because the Bible says so. I’m honestly having trouble seeing good in losing a house, buying groceries on very little, and wondering if I will have enough gas to drive around town.
Wow! I’m so sorry! I’m debating hitting delete on all of this. I loved your post and couldn’t agree with you more on everything you said. For our family, even though we were doing everything right… the recession and housing crash has just about killed our spirits.
Any advice? I’m open for sure!
Happy iFellowship Day! Glad I came by! 🙂