Could you do it?

[norsegirl]

Today on Oprah... Suze Orman's Recession Rescue Plan.

Step 1: Live on half
Prepare yourself for the worst by living on half of your income and banking the other half. This will help you to establish an emergency fund and help you to look at your budget and spending now, before something traumatic happens like losing your job.

I look at Jason's take-home pay and at our current expenses and I don't think there is any way we could do it. I mean yeah, if we lost the income and had to reduce we sure could, and I do have a plan if it comes to that, but it would be by giving up stuff that I'm not willing to give up now on a six month trial "just to prove we can do it" basis. Why do I say that? What would we have to give up? The house. If I add up just the mortgage, taxes, insurance and basic utilities (electricity, water and gas, not cable, internet or phones) and we're left with $65 less than half of his income.

It amuses (and somewhat scares me) that to live on half on an experimental basis we'd have to give up:
- food
- one of the utilities (electricity or water)
- the car (we wouldn't be able to pay the insurance much less the gas)

To hell with all the luxuries like eating out, new clothes and hobbies, we'd have to give up FOOD and we'd either have to live in the dark or stop drinking!?!?! Maybe in 10 years when Jason's income has gone up a little, and maybe I'm back working again, and the impact of the mortgage payment has been reduced by virtue of inflation we could do it. Heck, it might even be possible in 5. But right now, not a chance.

I'd love to know if there is anyone out there reading this that could do it. Could you live on half your income? Is it even possible for you?

Comments

Second attempt

[firefred.livejournal.com]

Having learned my lesson afyer accidentally deleting my previous reply, this will come from a saved textfile :)

- ipods: you are certainly more up to date than I am. Have not bothered to buy an ipod, as I notice that I do not use my portable CD- and MP3-players a lot anymore. There's too much entertainment in this house - basically I blame computer games for the lack of music these days. Of course I also blame the cats - they hate electric guitars. They also hate my keybords and my old drum computer, so I don't even bother anymore to hook all of that stuff up again. Although I still wish I had a piano ... the lack of music is rather disgusting, I used to play in a band, and I collect old vinyl and CDs. Oh well!

- saving: I have nothing against the concept of saving money, and yes, I agree that saving in the form of a certificate of deposit is still the most secure investment. What I do not enjoy are the low
interest rates offered these days. Like you, I am very wary of risky investments (stocks and bonds), and I have not made a lot of profit with the few mutual funds I have. I would not invest in mutual
funds again! Your comparison to gambling is totally correct, made me grin. It needs to be said that my view on these things is rather European. I dislike credit cards, too. In my opinion, don't spend
money you do not have. Living on borrowed money is basically the reason so many houses are being foreclosed these days.

- financial advice from Oprah: yes, in an ideal world, we would put half of what we earn away for an emergency, but this is not how it works these days. I put away whatever I don't need, and then just re-invest it. I also make a conscious effort to spend less on entertainment. I guess living with these animals is a luxury. We now see the vet bills as 'household expense', but it's brutal. And
again, so are groceries. I noticed this in particular because of our last two trips abroad, the UK and Germany. There, groceries were dirt cheap. I was positively surprised. Aside: they also tasted a lot
better, not as much chemical junk in them as here.

Sorry, this is turning into a rant :( - just don't let me get started on the weather forecast. They predict thunderstorms with a 10% chance this weekend. My foot!

Re: Second attempt

[eve-the-just.livejournal.com]

I bought the ipod so I could go jogging in Hawaii. It was awesome. I also used it to block out all the sounds and do yoga in the airport when we were delayed. Now we have a car adapter and I drag the little speaker thing around the house when I clean. I <3 my ipod. I can't imagine life without it. However, I also couldn't bring myself to buy an "updated" one every time they release a new model (which is the basis of Apple's business model). I'll use this one until it doesn't work any more.

I love credit cards for the convenience. I can't imagine carrying a balance though. I never carry cash, that's crap I can lose and not get back. I put everything on credit cards (or did when I lived in Canada, here I'm reduced to debit only due to the lack of SSN) but they were paid off in full every month. And yes, I think it is a European thing to try to live within your means, my mother is British and I learned it from her.

I don't think animals are necessarily a luxury. I think choosing to get them in the first place is a luxury choice that you should only make if you are informed about the true cost and willing to meet the financial demands of ownership (which you obviously have), but once you own them they are a part of the family and a responsibility. I think people who abandon pets when they hit financial difficulties are scum.

I remember food being very expensive in England last time I went over. That was about 10 years ago now and we were coming from Canada back when our dollar was shit. It might be different now. Groceries were also VERY expensive in Malta when we honeymooned there 5 years ago. Groceries are cheaper in Ontario than they are here though and that was what I was comparing to. I can't really figure why they are expensive here, I knew why everything cost so much in Alberta because it was like being on an island. We didn't grow anything other than oil and cows, so everything else had to be brought in. But I can't figure why things are expensive here, when we should be able to grow a lot of our own stuff. And also our population density is greater, which should allow for economy of scale. *shrugs* I've always had to buy groceries in expensive environments so I don't think too much about it any more. And it's not like I have a choice. You gotta have food.

With respect to the weather, yeah, 10% is basically no chance at all. I don't think our chances are even that good.

Pets/groceries

[firefred.livejournal.com]

I think people who abandon pets when they hit financial difficulties are scum.

I could not agree with you more.

Groceries: prices in the Uk have gotten so much better, there's also a better variety, lots of organic food that won't make you bankrupt. Same in Germany - although they've had a bunch of food scandals lately. What I dislike here: all these fillers. For instance, too much soy. High fructose corn syrup. Palm oil. Saying it's low-fat, but it's full of sugar. Claiming bread is whole grain, when it really isn't. I particularly dislike the latest prices for dairy and related products - and there's still SOY in those once you take a closer look. I order my dairy stuff from Wisconsin - they don't do that (see, even I sometimes splurge). Vegetables are a disaster, too. Pesticides. I have reasons for growing my own. A lot of what is sold here just tastes artificial. Where do you shop for groceries?