Worst is yet to come...

[frugalbabe]

I am 36 years old and I remember when I was little my parents going to the bank to get a loan for a car purchase, they had to bring paperwork, prove collateral, and then it was a tense wait to hear from the bank. Fast forward to my young adult years and collateral what is that? A down payment? Shoot! No one needs to mess with a down payment. Pre-approved credit cards were thrown at us from all directions, the approval for our first mortgage took all of 5 minutes over the phone. Now we have the mess that we have. I don't mind having house debt as long as it is reasonable and easily paid each month. But student loans? Well, we currently owe $39,000 is student loans and it's like having a mini mortgage. These loans allowed my dh to get a lucrative career and I will never regret college. HOWEVER, the prominence of student loans make colleges completely a world unto themselves they can charge whatever they want, and raise prices as fast as they want to (and they do!) because they know you will just get a loan or a grant to pay. I think if people started having to pay on their own and were going to less exensive colleges that would make the academic world a bit more realistic in how they set their fees and tuition. I really think college education is out of control!

[Greebo]

Not being able to borrow money to buy a home, car or to send your children to the college/university they would like to attend is considered to be a diminishing of our standard of living. Buying your own home has always been considered part of the "American Dream" and now those who would love to be able to buy their own home are unable to do so due to the tightening of the credit markets. Or, they are losing the home they purchased due to lenders approving people who should never have been approved in the first place or because they have lost their jobs, or a combination of those things.

But while buying a home is the American dream, until first the CRA, then the revisions, and finally the GLBA of 2003(?), it *used* to be that to buy a home you either paid 20% down, or you rented, for the most part.

Besides, I've checked - if you have good credit you can still get a mortgage. In fact, mortgage applications are in such demand due to the rates that if you apply today you're looking at 30-60 days before you even get an answer in some cases.

The people who can't get a loan now are people who shouldn't be able to anyway, IMNSHO.

Credit is not a bad thing, if it is used wisely...problem is many people like living the champagne life when they have a soda pop income.

Exactly what I was saying.

[CrazyCat]

I think what's really crazy is...just drive around and look at all these vacant homes.~Then look at the SIZE of some of these homes~GOD LORD!!!!!~there has been a LOT of talk about the size of the average family home...and how the square footage has increased SO much from the 70's & 80's. I believe it. Some of these houses being built are HUGE~!

[sabrelvssammy]

times are changing...our economy is changing...and it needs to...it has become 'ridiculous'...when our parents needed a pair of pants they went to the one or two stores that sold them and bought a pair....(or ordered from the Sear's catalog)...when we want pants we get in the car and drive to where we have 170 different places we can 'obtain' a pair of pants...(notice i say 'obtain' because how many actually PAY cash for anything anymore...just charge it....well you don't really own it til it's paid off...it owns you)... so anyway...the point being...stores need to close...things need to downsize....we don't need 4 gas-stations on every corner...(or 170 places to buy a pair of pants)....now sure...we DO need choices and options...otherwise the world becomes full of monopolies...but we don't need the excess we have going now...there's just too much 'over-stimulation' out there for everything....stores, restaurants, certain entertainment venues....no wonder we are all wandering around glossy-eyed....

are times tough...absolutely...some really innocent people have lost their jobs...and their incomes....and the saddest part about it is they don't know what to do....they lack total self-sufficiency skills and are spending their days wandering around aimlessly....now they are going to be forced to step back and take a look at their 'previous' lifestyles and start making adjustments....and alot of them are whining and crying about it because lets face it-if you didn't do all this of your own free will (like all us FV'ers here)...you are definately not going to want to do it out of lack of anything else being possible....so to them...'the sky IS falling'....to the rest of us...we will get thru this...and WE even are learning and fine-tuning OUR own skills a little bit more each day...and like someone said...we don't look at it as 'drudgery'...we have turned it into a 'game' that we try to win each day...because we have almost evolved to a 'higher plain'...and now all those that 'questioned' our 'wacky' ways are questioning..'"hey-maybe i could do that too'....but the saddest part about it all is I believe that the economy WILL get better (will take some time...and alot of people down with it)....some will adapt and survive and come out no worse for the wear or will learn a few new skills along the way and end up better than before...but alot of people will never change....they will stay lying down crying as long as the economy does...the economy will turn around...they will get new jobs...gov't will not have learned a single thing (as usual)...the lending will losen up...the credit will flow again...the people will buy again...and charge again....and become in debt or futher into debt....and we will begin a whole new cycle...so that in the future we can once again one day...crash and burn AGAIN....

[sabrelvssammy]

and speaking of the whole 'easy money credit card crap' how's this one for size

when i was 18 i got a pre-approval for a $5000 loc on a card...so guess what i did...i went out and bought 2 horses....yes horses....(now mind you i wasn't growing up on a farm...my parents lived in a sub-division)....but darnit i wanted a horse...and of course my horse would need a friend...and i would need a horse for my friends...so then i had to get a place to keep my horses...feed for my horses....tack...vet bills...on and on and on......(but i did LOVE my horses and i had them for 20 yrs)...plus i did end up with alot more...but that's another story....

[rainbowgc]

Why is it that countries that have a high rate of savings don't have the problems we have? This "new' economy just might right itself where people are better off.

[craftypam]

Texas peanut, I soooo agree with you. PEOPLE are not living within their means. The mentality seems to be; I want what I want when I want it

[Thevail]

What a beautiful word cloud rant sabre..truly amazing!
I'm falling in love with the literature/performance art that is blog speak!

And..I'm afraid you're right. I think there may be less people on the debt heavy crazy train in the future, so the overall percentage of society that is at least fiscally solvent will be a bit better.
But in reality P.T. Barnum said it best...there's a sucker born every minute.
To which I would like to add that approximately every two minutes a sucker realizes it's easier to be a sucker than do the work not to be one..

On the other hand..I really do see a lot of opportunities for the frugal and financially sane crowd in this sort of economic melt down.

Eventually wages will go up because the monetizing of the debt (printing money for the purpose of covering deficit spending) will inevitably lead to inflation and higher wages..so fixed debts like mortgages will become an even smaller percentage of overall wages...

And if you're doing well while the economy sucks and deflation is rampant....prepare for the future...leverage the savings from those good deals to make long term purchases you know you will need, save the rest and pay off the mortgage faster saving yourself thousands in interest.

A huge part of the problem right now for the frugal lies in the super annoyingly low rate of interest on savings, an unstable stock market, a bond market that's in the toilet..in fact there just isn't any good place to let your money make money. The cornerstone of saving has crumbled.