- Get More Information Here:
- Learn Everything About Forex Trading
Submitted by: Neil T Thompson
There was a time and it wasn t all that long ago when a Middle Class lifestyle wasn t just obtainable; it was downright easy to be a member. Really, all you needed was an average job, and you were in a home, a nice car, occasional dinner out, color TV, an annual vacation, and a pension for when you got older.
Obviously, those days are gone, so I don t want to wax poetically about nostalgia and why can t we bring them back, etc. But I do want to point out the two reasons those days have left us, and I d like to expand on one of those reasons:
The most obvious reason for the end of the one average job s paycheck can raise a family is that the economy changed. Expenses outpaced wages, and many of those jobs (manufacturing, etc) are gone. And they won t come back. Forget relying on the government and waiting for good times to come back they aren t.
The second reason, however, is one that doesn t get as much play, because it s personal, and it hurts a little. And that reason is simply this: WE VE changed, and we want more, because there is more. Many families cannot make it on their salary not because food and shelter cost too much it s because of all the other stuff.
I d like to expand on this last point somewhat, and discuss how a return to frugality can help.
To start, what really changed in terms of what we buy and what s available? Well, the answer is, everything changed. There s so much more available to us now, and more importantly, many more things that are an almost expected part of everyday life (cellphones for the entire family, anyone? There s something a 1970 s era family never had to pay for.)
We want the food and shelter and automobiles that people used to have, but we also want a flatscreen TV in every room, cellphones for all, birthday parties for kids that run into the hundreds and even thousands, satellite radio, DVD s (every child I know has a personal DVD collection of Disney and Pixar films), and more. Plus, we want more space the average house is far bigger than one just thirty years ago. The great room is now part of our vocabulary.
We ve added and added to our lives, at a pace that far exceeds salaries. This is why the credit card bill is a monthly staple. We want more life than we can afford. And it s why many people find themselves in trouble.
I mentioned earlier that this hurts , and it s why this reason doesn t get much press. Nobody wants their kid to be the only one without a cellphone. Or without Toy Story 1, 2, and soon even 3 on DVD. Or without cable TV (on a flatscreen). I ve personally known parents who stressed about paying the heating bill turn around and buy their son a new Xbox that same week! This sort of thing happens more than you think. And it s insane.
Here are a few stats:
One in nine families can’t make the minimum payment on their credit cards.
One in eight mortgages is in default or foreclosure.
One in eight Americans is on food stamps.
More than 120,000 families are filing for bankruptcy every month.
*(source: Elizabeth Warren’s, “America Without a Middle Class.”)
Ok, how do we fix this?
I co-founded and run a website called The Daily Middle (www.thedailymiddle.com), where we explore the global economy and how it specifically relates to the middle class (typically individuals or couples making between $40,000 and $120,000 per year) here in the U.S.
The Daily Middle relies on those experts who saw this Greater Depression scenario starting to play itself out years ago experts like Peter Schiff, Jim Rogers, Dr. Marc Faber, Gerald Celente, Ron Paul, David Walker and Nouriel Roubini.
In my research, I run across articles, videos, stats and quotes all day long. And my advice in this case can be summed up with following two quotes I find particularly meaningful:
“One does not accumulate, but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs towards simplicity.” – Bruce Lee
“It was hardly an exaggeration to say that the American standard of living was bought on the installment plan.” – Historian Daniel Boorstin
You see where I am going here, right? For many families, fixing their economic situation can be as simple as saying no . Right now, the average American family s net worth (adjusted for real inflation) is at 1970 levels. Take a look at a family in 1970 and see what their expenses were it may sound drastic, but that s kind of where you need to be if you want the same economic lifestyle. Ok, pay the internet bill, but does everyone in the family really need a cellphone? Or cable TV? Do gifts have to be charged? These are all places to start and yes, living frugally means sacrifice and a change of mindset.
Now, for those of you who are waiting for some Government magic, let me dispel that right now:
The official National Debt has just surpassed $13 Trillion (not including the massive debts of Freddie Mac and Fannie Mae which are backed up by the Federal Government, estimated at $6.3 Trillion.)
Our Unfunded Liabilities (Social Security/Medicaid/Medicare) are approximately $60 Trillion
Our National Debt is now growing 3 times faster than decades ago
We are the world’s largest debtor nation with a National Debt that is 14 times larger and 89% of GDP (not including Fannie/Freddie debts and unfunded liabilities.)
We are in deep, deep trouble, and if you think things are going to turn around, you are mistaken.
To me, there s really only one solution, and that s to live below your means and return to frugality. If it requires giving up a few things that others are paying on credit for, so be it. If it requires cutting coupons, buying off-brand merchandise, well, that s what it takes. If it requires a combination of both, fine. But being frugal and living below your means does not just help you today it will allow you to weather almost any economic storm.
But being frugal isn t always easy. It takes a good, objective look at everything you are spending money on, and it requires hard choices to be made. It s not just cutting out a latte every day. It might mean your child doesn t text his or her friends, because the
pay as you go cell phone is for emergencies only. And that s ok.
We hope you will join us at The Daily Middle for our daily dose of reality to keep your feet firmly planted on the road back to frugality.
Are you living a frugal life? Do you have any tips for your fellow readers? If so, we would love to hear them. And if you re not living the frugal life, are you ready to start?
About the Author: Mr. Neil Thompson is a professor of economics in one of the famous US Universities. He has interest and a vast knowledge in US economy. He has attended many seminars and conferences on US and World Economy. Daily Middle (
thedailymiddle.com
) is a site where one can get information on US economy
Source:
isnare.com
Permanent Link:
isnare.com/?aid=667840&ca=Travel