The next presidential election is already devolving into out-of-context sound bites, mostly with regard to the economy. It's totally annoying. Fueling this, in part, was the report that the average American net worth is down a ridiculous amount in the last five years. What gets lost is that it's on par with 1992 levels, and 2008 is when the housing and credit bubbles finally popped. The housing bubble is a particularly important event, since so many people have their worth tied up in their houses. My house was worth $210k six years ago. Now it's $155k.
My point is that this has nothing to do with any president, past, present or future. These guys can't make your house worth more. The hard fact you need to live with is that you took a risk when you took out a loan on your house, and now you'll pay for it. I'm in that boat too. If you're one of the irresponsible people who couldn't do high school math and got into a ridiculous ARM loan destined to screw you, I have no sympathy. In fact, I blame you for making the bubble worse, and my house worth less.
Now that I've got that rant out of my system, we've tried to live in a new financial reality. When the job market sucked and we were upside down on two houses, with tens of thousands in credit card debt in 2009, it's an understatement to say that we had to make some adjustments. Oddly enough, having a child didn't really make life more expensive, because for the first year or so, we never really did anything! That's not exactly true, but we definitely went out to eat less, and perhaps out of obligation to Simon, spent less on ourselves.
By late 2010, we were in a much better place. I don't remember when we got to a debt free point (other than the mortgage), but I promised myself I would avoid debt and start saving like crazy. Right now I commit to saving literally half of my net income. I've mostly been able to do it, but then we had the car accident on Christmas Eve, which zapped our savings five digits. It's still going fairly well, but still not as fast as I hoped.
I'm finding that the reason for that is the old credit card trap. I tend to buy stuff from Amazon, or on vacation, using the credit card because I'm always pushing the cash flow hard from saving. This month, it finally caught up with me, with a bunch of big expenses like my license plates, vacation expenses, large charitable donations, prescriptions (because my benefits are shitty), and non-essential things like Star Wars on Bluray. I can pay the stuff off, but it comes at the expense of saving, which strangely hurts more than getting nowhere on a card balance ever did. For the first time in the last year, I had to back off on a savings transfer, and I'm self-loathing a little.
But that's ultimately the positive reality that I should have been living in since the day I opened my first checking account. Hindsight and all, but you have to wonder if I'd be kicking it on a beach or something by now if I was smarter about things from the start.
I'm able to let go a little because I can't really put a price on the memories and goodness that came out of some of those spending categories. I so needed that vacation, and we really enjoyed ourselves. The best things in life might be free, but money still buys you some nice shit that makes you comfortable.
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