Recession Mama











{September 14, 2009}   When the recession started…and when will it end?

By Katy

lehman_brothers

Lehman's tower in NYC

One year ago, Lehman Brothers collapsed.  They filed for bankruptcy on Monday September 15, 2008 which created a domino effect that caused our current global economic crisis.  Today, the pundits say the recession is essentially over.   But is it?

According to CNN, only 59.2% of adults in the U.S. are currently employed.  So if I have 100 friends, almost half of them would not be working!  And you know what?  Although I am not consciously keeping track of whether my friends are working or not, I fear this statistic may be true.  On the other hand, even when we are working, some of us are not seeing the same amount of pay as before.  Now let me ask you, are companies scaling back with salaries and pay in order to survive during these hard, economic times or are they taking advantage of workers’ willingness to work under any circumstance?

I talked to a recent grad who just got a job.  Lucky right?  Well, she has to move to another city, and since the job is a government position, the hours and pay are less than what it should be in a “normal” economy.  A hotel employee told one of my relatives that he’s working three jobs these days!  Imagine that!  He has three jobs!  But he says it’s the only way to make ends meet and he barely sleeps.  As for me, I have worked this year, and I have not worked this year.  I have gotten paid less than my “normal” rate, but like the two people above, I am also not complaining because it’s absolutely better to work than to not work!

Happily ever after with my financial decision?

Happily ever after with my financial decision?

I have also postponed a wedding until 2010.  If you’ve been following this blog, you already know that.  You know that I just hired a wedding coordinator, and we’re looking at locations for a wedding next Summer.  What you don’t know…I’m still skeptical about paying for a wedding!  I have the entire amount saved up already, but I still think about whether or not I want to spend that money on one night.  My fiance and I think about putting that money into our retirement fund.  We think about paying down more of our mortgage and refinancing.  We think about buying the unsold unit next to my place, knocking down the wall, and building a bigger loft.  We think about starting a small business.  And sometimes, yes, we think about using the money for a wonderful party celebrating our union with our friends and family.  And no, that doesn’t have to cost the equivalent of annual private school tuitions.

I think this is what this recession has taught me.  You can have money or you can not have money…this recession is the BEST thing that’s happened to everyone…if you’re willing to learn and not repeat the same mistakes.  My recent lesson:  It’s important to think about our choices when it comes to money.  Just like it’s important to think about what we put into our bodies — healthy fruits and veggies or fattening fried foods and lots of sweets — the choices we make today will affect our health, physically and financially, later down the line.  Make healthy and wise choices today, and we’ll live better when we’re older.

When I was in my 20’s, I didn’t think about money.  I thought I had plenty of time to pay off the debts, to save up for retirement, etc.  And if I were to have a wedding in my 20’s, I would’ve done it without even thinking about it.  Now, I would’ve thought about whether I should be getting married or not.  But I wouldn’t have thought about the financial aspects so much.  Now that I’m in my mid-30’s, I don’t have as much time to save up for retirement.  And like most of you out there, I lost about 50% of my retirement account in the last year and a half.  Only this last quarter, did my 401K skip back into positive territory.  So I’ve been wrestling with this dilemma for awhile.  I thought postponing the wedding until next year would help ease my conscience.  It did for about one day.  But I’m taking this one day at a time.  Just like marriage, right?  Right?



recessionmama says:

From Heather,

You are in a difficult position. Spend or don’t spend on a wedding. I would recommend putting aside all the money you want for retirement funds, mortgage payments and new endeavors. Use the what’s left over for a wedding. We were on a tight budget for our wedding and still had a great time.

Really, this is a celebration about your FUTURE. And you can’t have much of a future if you’ve spent all of your savings.



Rebecca says:

Hi Katy,

It’s your long lost NYU mentee. Just wanted to say I loved reading your newest blog post. This recession really makes you put things in perspective. Even though I’m not engaged, I constantly think about how I’ll ever be able to afford a wedding, especially considering my hefty NYU loans. Your post really touched on something that not a lot of people talk about! Thanks for sharing your story.🙂



Carla says:

Katy, I love all the ideas you have about what else you could spend your money on. I agree with you, those things do make more sense than shelling out all that $$ on one night. But you might regret not doing it. I don’t know. I mean, I got married in Heather’s (gorgeous!) home out of financial needs, then had a big bask 1 week later in Mexico City, which I did not pay for (well, travel and hotel and such, but not the reception itself) so I almost had the best of both worlds. Your advice is so accurate. Now is the time to save and plan for the future…and so I do not envy you having to make that decision, bc our brains work the same way when it comes to money. Only, you have it and i don’t. ; )



Katy says:

I hear that Sister Heather! Rebecca, it took me 10 years to pay off those student loans, and I was so proud of myself that I bought myself a LV bag!! LOL! And Carla, your weddings were amazing!!! Heather is such a great friend for allowing you to get married in her previous gorgeous home. And you were lucky that the reception in Mexico City was paid for. I sure wish my wedding would be paid for. But I guess (combining all of these posts)…if I can pay off a $30K loan from NYU, I can definitely pay for this wedding. In fact, I’m way ahead since I’ve already saved up enough for the wedding! And I’ve learned from my money mistakes so I won’t be going out and buying a LV handbag afterwards. 🙂



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