Has the financial crisis changed your thinking?

[ironmaiden]

Has the financial crisis changed your thinking about ..

how you invest?
keeping your money in the bank?
keeping money in your home?

Do you worry about ...
the prospects of gloomier times ahead?
the prospect of a national/worldwide depression?
the stability of your job?
keeping your house?
ability to get loans (auto, home, college, personal)?

Have you changed anything that you are currently doing because of it?

[Greebo]

how you invest? Yeah - everything is ON SALE!
keeping your money in the bank? Nope
keeping money in your home? Nope

Do you worry about ...
the prospects of gloomier times ahead? I'm sure there will be fallout, but once upon a time, I slept on pool tables. Very little could be worse, and no matter what happens, I'll get through it.
the prospect of a national/worldwide depression? I'm concerned that the Gov't will prolong the agony by trying to help. There's a strong argument that this was the case in the last one.
the stability of your job? It might be affected, but I am not afraid of other kinds of work if I have to look for it.
keeping your house? Not really - I didn't buy "too much" in the first place.
ability to get loans (auto, home, college, personal)? Getting loans only weakens a financial position, not getting them is a good thing IMO.

Have you changed anything that you are currently doing because of it? Yeah, I bought WM when it was on sale and got lucky - right before the proposed bailout, shot up 62% when I cashed out. Wish I'd bought more! (But it was a spec buy - could have gone either way...)

[Lady_V]

how you invest? -- no, only have a 401k
keeping your money in the bank? -- we don't have enough in the bank for it to be uninsured
keeping money in your home? -- we've always done this

Do you worry about ...
the prospects of gloomier times ahead? yes - more on how it would effect DD
the prospect of a national/worldwide depression? yes, more for safety reasons
the stability of your job? yes -- he does satellite installations... whats one of the bits of advice we give to people looking to cut their budget??? Cut the cable/dish. If people can't afford it, there is nothing for him to install. This is part of the reason he will be going to school for Radiology.
keeping your house? No, that is the one thing that I have made sure will always be taken care of
ability to get loans (auto, home, college, personal)? If we don't have the money, we don't get it. We did talk about 'what-if' he needs to take out a student loan. We would sell everything in our house before we signed for a loan

Have you changed anything that you are currently doing because of it? Yes, I am spending a LOT less than I was before, stockpiling things when I can. If a depression/prolonged recession is in our future, having a years worth of food won't keep us going forever, but hopefully it will tide us over long enough to become self-sustained.

[monkeywrangler71]

Has the financial crisis changed your thinking about ..

how you invest? My thinking about how I invest changes constantly based on market conditions
keeping your money in the bank? No
keeping money in your home? No

Do you worry about ...
the prospects of gloomier times ahead? There are always gloomier times ahead, I'm not afraid to sleep on pool tables.
the prospect of a national/worldwide depression? Might happen, might not. Life goes on.
the stability of your job? I don't have a job, but since my dh works in financial services, umm, yeah. But again, I've survived on nothing before, I can do it again. No point worrying about it.
keeping your house? If the job is gone, they can have my house. We wouldn't be staying here.
ability to get loans (auto, home, college, personal)? Not interested

Have you changed anything that you are currently doing because of it?
No

[itlw8]

We are pretty conservative so no it really has not changed how I do things much... the 401 k may have dropped but it will come back up before we need it.

I had already started on saving more and making sure we are debt free

As far as getting a loan I am sure we could if needed but why would we ?

It does make everything I do seem normal to friends. but really we did this once before in the late 70's gas shortage, earth contact homes, economy cars, canning, window quilts... but did it last ? no
When we bought our house we had to have 20% down... but then we were not buying 200,000 homes either.

[TheRootedNomad]

Has the financial crisis changed your thinking about ..

how you invest?
keeping your money in the bank?
keeping money in your home?

Do you worry about ...
the prospects of gloomier times ahead?
the prospect of a national/worldwide depression?
the stability of your job?
keeping your house?
ability to get loans (auto, home, college, personal)?

Have you changed anything that you are currently doing because of it?

The answer to most of these is no. The current economy has not changed much of my financial life/map. It has changed how I handle other things though. While it hasn't effected the stability of my job I am less likely to make an intentional career jump right now as there are so many areas that are being affected. I am probably MORE likely to take a real estate leap in the near future with the housing market going down.

[ironmaiden]

how you invest? We'll leave the 401K alone. But nothing else is going into the market.

keeping your money in the bank? It'll stay there. We use a small town bank that didn't do any mortgages that didn't have lots of paperwork associated with it. They never bought those funky financial instruments. So I'd like to think that they wouldn't go under.

keeping money in your home? I would like more cash in the house. A bank holiday is a possibility at this point. Don't know how long it takes the FDIC to "return" your money or what happens once they are innundated with these requests.

Do you worry about ...
the prospects of gloomier times ahead? Yup. We were originally thinking about buying a pop-up or something, driving across the country, traveling more now that the kids are a bit older. We'll put those plans on hold for now.

the prospect of a national/worldwide depression? My parents and DH's grew up during the depression.

the stability of your job? DH's job should be stable. But then you never know.

keeping your house? We never overextended ourselves. We have a relatively small amount to pay left about 4 years worth. I have stopped prepaying the mortgage though. If you are ahead, but then lose your job and fall behind, they wont care that you were ahead, just that you stopped making payments. Right now the money is better in the bank.

ability to get loans (auto, home, college, personal)? We shouldn't need any loans. Kids have another decade til college.

[monkeywrangler71]

I have stopped prepaying the mortgage though. If you are ahead, but then lose your job and fall behind, they wont care that you were ahead, just that you stopped making payments. Right now the money is better in the bank.

Really? Do you not have skip payment options? Our bank lets you skip one month a year, 4 months during a crisis (option can only be used once for life of mortgage) and/or as many payments as you have prepaid. So, if someone was doubling up their payments then fell on hard times they would be able to skip as many as they had doubled.

[forHISglory]

Has the financial crisis changed your thinking about ..

how you invest? Yes. For the moment, we are putting any extra cash into high yield CDs. I worry about my current investments melting away, but I plan to not touch them, at least for now. I have faith that the market will come back. Just don't know when...
keeping your money in the bank? So far, no qualms on this.
keeping money in your home? We already keep some, but I don't really want to keep a lot here.

Do you worry about ...
the prospects of gloomier times ahead? Probably this is a given, but I'm not going to get all depressed and gloomy about it. People usually tend to be made stronger by tough times.
the prospect of a national/worldwide depression? Very possible that this will occur. I worry more about how humans will react, becoming violent and making stupid knee-jerk decisions.
the stability of your job? I'm retired, but work part time. I teach a college class. More than likely this will continue as folks look to better themselves for different jobs. But a question remains about people having enough money/loans for college.
keeping your house? All paid for, so would only need to worry about paying insurance or taxes. So far, so good, as we can dip into savings if need be.
ability to get loans (auto, home, college, personal)? Don't plan on taking any loans. At this stage of life, its not prudent for us go into any type of debt.

Have you changed anything that you are currently doing because of it? Our already frugal lifestyle is getting "frugaler". We are planning a much more frugal Christmas and birthday circuit, we won't be traveling on vacation next year, and will be using food stockpile much more, thus cutting food budget (hopefully...). We have put a moratorium on clothing (not that we really need more).

[Greebo]

I have stopped prepaying the mortgage though. If you are ahead, but then lose your job and fall behind, they wont care that you were ahead, just that you stopped making payments. Right now the money is better in the bank.

What do you mean "ahead"?

Do you mean paying extra principal, or are you paying payments early?

The former is always a sound move. The latter, never.

When you pay extra principal, you get two benefits.

1) You have increased equity. If you should be foreclosed, every penny of equity counts in your favor. The bank can only come after you for the difference between what you owe and what they sell it for. The less you owe, the better.

2) You pay less interest over many years. This is because of compounding inherent in the mortgage. If you pay $100 more this month, that is $100 you will never, ever pay interest on again, for the next however many years you have left.

On the other hand, if you are paying your mortgage payments simply ahead of schedule, like the Nov 2009 payment has already been paid, as opposed to applying the extra money to principal, so you don't have to pay anything until November, there's little point to doing this. You haven't paid off any extra principal, you've just paid off interest that hasn't actually charged yet. In point of fact, usually this isn't actually an option - any extra money paid is extra principal, automatically, with any reputable lender, IIRC.

[Starlight9803]

overall, the financial situation hasn't really changed our thinking, but it has stepped up our efforts in getting rid of debt and saving more money. We have 12.5 years left on the mortgage, but a low interest rate (fixed) and low payments. We will be upping the extra principal payments once debt is payed off. We do know that now we will be saving and paying cash for anything else we buy, housing included.

[ironmaiden]

We have 4 years left on the mortgage. Right now we could use more cash in the bank, so we're not paying extra on the mortgage. We have a wonder 4.5% rate - we lucked out and financed at the exact bottom. In the end, we'll have paid mortgage payments for a total of 18 years. This is Massachusetts, so we're doing far better than our peers in this regard who refinanced like crazy, taking out money for home improvements, bought bigger houses. At the peak of the market i.e. 2005, our house was worth a half million.

[shoiji]

Am really glad I did not buy a house, was encouraged to but at the time all I could think about was the additional expense. Have not bought a new computer yet. Would rather save more money instead of completely depleting everything I saved on a computer. You just don't know what can happen in a day, week, or month(s). So this is definately making me demonstrate more control of my spending habits.

[jamie79]

Yes and no. We are leaving the retirement acct alone. I would like to have more money in the house then we do. We are working on getting the last c,.c gone.

We are safe as far as job loss. Dh is military so he is not going to be losing his job.

[tomishco]

We only have a 401K and won't touch that. Employer does not match funds. We'll see about opening Roth IRAs next year.

We own our house outright thank goodness and it's a modest home but we're so glad we didn't 'upgrade'.

Not too worried about recession/depression but want to get even more frugal for more peace of mind.

I'm not really worried about DH's job, but it's crucial we have our health ins., as DS is type 1 diabetic.