Cutbacks

It seems that everywhere you look, people are making cutbacks. My family is no exception. The cutbacks that we have had to make are a response to those that the companies that my wife and I work for have made.
The company that we work for has posted more than half a million in losses in just the first two months of this year. In response to that, they have to cut costs to prevent further devastation. This is not the only business to report huge first quarter losses already. It seems as though the cutbacks always seem to follow the same general sequence. Most businesses and even families seem to follow the same guidelines. Here, is my vision, of how the sequence goes.

1st - Cut spending. Most people see this as a no brainer. When you don't have coming in, what you have going out, you need to fix the balance. You begin by buying smarter, and stretching your dollar. My family has begun to clip coupons again, finding ways to reuse things one more time, and selling things on ebay, that have been in the closet, attic, or garage for years.

2nd - Cut more spending. This one can also be referred to as reduction. In a business, it generally means "lay-offs" in a home, it is the real cutbacks. Let's look at what we can live without. Reduce the satellite package, reduce cell phone minutes, car pool more often. In some businesses and homes, managers or members look for what they need to spend now, in order to save money later. I have an expensive hobby. Guns! I love going out and shooting anything I can, anytime I can. I have increased the time I need to spend in my hobby, by casting my own bullets. Spend a little money, save a lot, without leaving my hobby behind. We all need those hobbies or this time of cutbacks will leave you living on the funny farm. Find ways to make it cheaper, or take more time. Cause with your hours getting cut, you'll have more time to work in your hobby.

3rd - Cut even more spending. For a business this usually means another wave of lay-offs. Generally followed by a combination of others measures. Some of these being, reduction of or loss of benefits. If you weren't effected by layoffs, then your hours will get cut, or your pay may get cut. Companies will place a "freeze" on payrolls. No new spending! That raise will have to wait. At home, since you can't really reduce your payroll there, you look for other ways to cut spending. Credit cards will now get removed from the wallet or purse, and they get minimum payments, so you have the most cash to use, and don't need to use credit. That retirement plans contribution, gonna happen, but just the bare minimum to keep the account open. This is where grocery shopping gets fun. My wife likes us to eat healthy. We have always bought whole wheat bread. You know $3 a loaf. Last week, we bought 6 loaves of whole wheat bread dough, for the cost of 2 loaves of bread. Time to bake our own. in the past few months, spending on the goodies has been reduced alot. My wife spends more time at the oven though. We gotta have the little extras for lunches, that we pack for work. Can't afford to eat out. Leftovers rule!

4th - Liquidation of anything! Sell everything you can, and get out from under any credit debt that you have. Live on cash! Mostly a household thing there, but businesses will do that just before declaring bankruptcy. Which, I'm not going to list as the last step, but it is. Not much else to explain about it. When you have nothing left to cut, and nothing left to sell. That is what the people do. Some people will do this before anything else, some people will hold out as long as they can.

I see this happening all over. My wife and I have been trying to be proactive about this economy. We started making our cut backs several months ago, before things at our home started getting tight. It does help that I'm "Jewish" anyway.

The thing to remember, the economy is not really effected by any one of us individually. Unless you are Warren Buffet or Bill Gates. There isn't much you can do to help, or hurt the economy. Go on living your life. Enjoy every minute you're alive.

The best advice I can give now, is to take advantage of that lake down the road, or the mountain you wanted to climb since you were 12. They are still there. And being outdoors enjoying what the mother nature has to offer, is generally some of the cheapest entertainment you can get. Not only is it inexpensive, but you can make it romantic, and a fun way to spend time with your kids, without letting them know that your broke! Not to mention. Healthy! Who can afford a doctor now?