Merchants are slashing prices, making deals, in the hope that they can get shoppers to buy and not just look this holiday season. Good luck with that. While I'm sure they'll make more sales than they would have otherwise, it feels like people are battening down the hatches for the storm, even those who still have healthy salaries coming in.
Despite the Fed loosening the credit market, making credit available again, the government is finding consumers do not necessarily want more debt and that "households and lenders may not respond much because of the wealth destruction from plunging property and stock values." Count us as one of those people. Our IRA, 401k and children's college funds were hammered this year. It is like we didn't put any money in at all the last few years. Now maybe those portfolios will come back, but maybe they won't, at least in time for our eldest to go to college in less than 10 years. So, while continuing to add to the college fund, in the hope I'm buying at the bottom, I'm also sticking a little extra cash into savings (our emergency fund) in preparation to add that to the college funds once we're sure things have stabilized.
At the moment we're fine as we've always tried to live within our means (emergencies like the furnace dying in winter notwithstanding). However, we know too many people who have been laid off, sometimes both the husband and the wife, and see that it could happen to us. We're not to going to spend what we don't have to. The 9 year old car, which needs a little work, still runs fine. Same for the non flat screen 32 inch TV.
We'll still do some shopping as we're in a house and there is always a project that needs doing, but anything optional is being delayed. And if I see a good deal on a car, and/or decide it is not worth it to fix an aging car, I might pounce sooner rather than later. Base case scenario, we go on a nice shopping and investing spree in a year or two.
Again, we are fortunate. We are not the working poor. Things could be much worse. My wife works for the state (NJ). Many of the people she supervises are lower level employees who make around $30k per year, the working poor. Originally, the last payday for the month was to be today. However, since the state offices are now open the day after Thanksgiving, payday is Friday. Yesterday, as I read a story about 30 million Americans (about 10% of the population), will be getting food stamps soon, she told me that several of the employees had to cancel their plans for tomorrow as they don't have enough money to buy a turkey tonight. Somehow, not shopping till we drop the next few weeks doesn't feel so bad.
Happy Thanksgiving.
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