Each American home is responsible for 68% of the GDP! Our spending is the indicator of the financial health of the nation. Our spending can keep recession at bay. In 2008, we saw a recession when house funding went belly up to put it simply. Then again in 2020, when the world basically stopped and it took a lot of work to get the wheels of production and distribution turning again. And now, are we in a recession? It feels like it but all the numbers keep saying no. It’s almost like we are being gaslit by the media. Something feels “off.”
We All Start Here!
When we go into a recession you probably feel like our kids when they launch and move into a place of their own or at least assume all the economic activity for their living and their responses. When we first “go out on our own”, we soon realize there isn’t enough money. This is Economic Stage 1. You are younger with less credit. You work but you have to “set up your life up” with things like furniture, clothing, and other needs for your new lifestyle.
We look at our parents and think why can’t we live like them. First of all they have two incomes and you only have one. In this stage, you have housing, food, and transportation needs. It feels like you can’t afford all three. And maybe you can’t. You have to get creative and learn to do without, maybe get a roommate, or take public transportation. The reality is most likely they didn’t splurge on vacation at your age or painters to paint a room. When you are in stage one you have more time. You can use that time to paint or do the things your parents may hire help to get accomplished.
That’s It!
And sometimes we get forced back into stage 1. Recessions tend to do that to our lifestyle. I was listening to Connor Lokar with ITR Economics was talking about America’s spending and he noted that yes American Household spending was down but the government had met and exceeded the deficit in their spending. “That’s It!” I’d had this inkling that all was not well on the homefront and then that information confirmed it. Many people have been forced back into stage one where their spending exceeds their income. This is a stressful stage. In the last 18 months – 2 years rent has skyrocketed to ridiculous amounts. And the price of groceries went crazy. It’s time to face the music, the prices aren’t going down. One of those two factors alone can bump you down to stage 1. The issue now is you don’t have the time you had when you were in stage 1 the first time! Stage 1 is all about lowering your expenses.
How Do You Get to Stage 2?
You can adjust your spending to match your income OR you can find ways to make additional income. Even if you do find a way to adjust your spending you just never know what is coming your way next that may impact your finances to no fault of your own. Tune in next week to learn how to get to stage 2.
EPISODE RESOURCES:
- The Sunday Basket®
- The Paper Solution®
- The Productive Home Solution
- 521 Lisa’s Organization Story 2002
- 522 Lisa’s Organization Story 2007
- 523 Lisa’s Organization Story 2012
- 524 Lisa’s Organization Story 2017
- 525 Lisa’s Organization Story 2022
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