Wednesday, February 20, 2008

Personal Economy and Budget Cuts.....

I am not sure about everyone else, but my family is struggling to make ends with our cost of living because housing and utility costs rose including monthly food and automobile fuel costs. I take the bus to work daily which means I saved over $250 a month of wear/tear, fuel and parking costs just by paying for a simple bus pass.

My family is one of those America’s working middle-class families who are facing a wave of economic insecurity even though we do have a secured job and we are paying our bills. However, our expenses are higher than our income due to prices going up such as food, auto fuel, others and especially medical bills. Our medical bills have been getting bigger over the years.

My wife and I are making efforts to cut costs and reduce the amount of not needed costs which means giving up what we enjoyed.

I am sure many of us have financial fears regarding the effects of the corporations and businesses attitude in regarding working with us because they are in the business of making money and they don't care if we have problems. This is just another specific economic area that affect other economic areas and they are all related. Corporations and other businesses needs to remember that we consumers drive the U.S. economy according to our ability pay for supply of goods and services that debts are in nominal terms, falling sales and wages made it impossible to service the debt. When that happens, everything else in economy will be affected. There are limited programs that help people survive through bad economic times because many corporation do not want to work with us. They rather have the government work with us while they reaping in millions.

In one of my posts in this blog, I posted about most corporations are paying their CEOs and other exectuves too much and I find that disgussing. Shareholders needs to speak up and tell the executives to shape up or else. While I understand the logic behind the salary amount which competition is expected because they attract a large number of qaulified applicants. I know CEOs face long hours, considerable travel, and intense pressure but we have to remember, there are hundreds of thousands CEOs who are not making over $ 150,000 a year including non-profit agencies. It is very laughable when many CEOs earning more than 100 times the average wage. They should be helping the company and sharing their wealth with their workers. CEO's bonuses are even WORST and their employees working their butts of making the companies success, executives should also have their bonuses should flow through so all members of a company have a reason to perform.

The purpose of the corporation was and still is to generate profits for its investors (shareholders) which is not a problem for me because I am one of those "investors". However, I am the investors who are trying to live while executives are making more money than they deserve. Therefore, corporations and major investment holders really do not serve minor investors but their own. Our relatives ran into these kind of business people in the past (1800's, 1900's and years later) and they were often referred to as "politicians as villains and businessmen as heroes" and they still are today. Today, many corporations are restructuring two processes that are known as "downsizing" and "outsourcing", because they are basically shedding of higher-paid employees (not exectuves) and the hiring of low-wage contingent workers elsewhere. Therefore, there are American workers who are not making money or not making enough money to help with the economy.

Back to our budget plan.....
After paying off debts, we are going to invest more so that when economic crisis come again, we will be ready and will not rely on corporations and government. Since my income can only pay so much therefore, in the future, I am going to make some changes in my budget to focus on a much more simple living than I am living now. My first step to making better choices about my family spend our money by living consciously. This is not about to "consume less" but rather to "consume differently" to save money in the long run.

My family's first focus is our current debts. We are going to use our tax refunds and rebates towards our debts. Close out some accounts that are considered wasteful even though they do "help U.S. economy". I am sorry to say that our rebates are not really going to help U.S.'s economy since many companies do not and will not like working with consumers so therefore, there's no point working with them and I rather spent my money to companies that desires to help the economy by working with consumers rather than relying on the government alone.

If I remember correctly, the last time we received tax-rebate checks, most Americans have used the money to pay off their debt -- not spent it in the stores. Recently, the UBS Securities commissioned survey was released by the International Council of Shopping Centers, Inc. found that 43% of the 1,000 surveyed Americans would pay off debt, while 26% said they would save the money and only 24% said they would spend it.

So... this week and weekend, we are going over our bills and find ways to cut costs. We are cutting our cable and phone features.

Oh yes, in terms of investments, I am looking into investing into companies that don't have high executives salaries and bonuses. I want companies to work for investors and consumers more than they are working for their own bank accounts, pockets and wallets. I would encourage all investors do the same.

Are you all facing similar issues as I am?


Merelyme said...

yes! the economy sucks! any money coming into this household will be going to pay off debt as well.

whimsicalnbrainpan said...

The economy is beyond awful. I struggle with my finances but I am lucky in that I only have myself to worry about.


Number crunching is one of the things which roll around in my head over-and-over. It seems that ever since the MS dx money has become quite a different commodity.

Mrs. C said...

I can't imagine that spending, long-term, is any help to the economy. It's a shot in the arm at best. If fewer people ran into problems like bankruptcy or foreclosure, it would stand to reason that our economy would be stronger. Duh. Why don't the economists seem to see that??