Friday, October 24, 2008

How to Survive the Coming Depression

As much as I'm required to use the word "leverage" in my day job, I don't believe in it. That is, I don't believe in holding debt. I always pay my credit card (yes, I only have one) bill in full. My mortgage is less than $1,200 a month. (I was lucky to have bought my house in 1999, before the market went crazy, but I also bought it in a neighborhood I could afford. ) 

I drive a 14-year-old car.  I don't have cable TV. Until a few months ago, I had a dial-up Internet connection that cost only $10 per month. (Now that I have high-speed wireless, it's about twice that.) With freelance income, I make close to six figures. Yet I recently started bringing lunch from home because I decided I could no longer afford the $30-plus per week I was shelling out. 

Why do I live so frugally? Partly, it's just my nature. (As a kid, I spent a lot of time tagging along on my parents' visits to thrift shops and flea markets.) But the reality is, my salary goes to pay for health insurance (which my employer barely covers) and my nanny (who works about 55 hours a week). 

And that's what pisses me off about the economic mess we're in. From Wall Street fat cats to deadbeat homeowners, it seems everyone is going to get bailed out but me -- when it's people like me who should be rewarded, because we had the sense to actually live within our means. 

For instance, in my working-class to lower-middle-class neighborhood, a suspicious number of people drive new cars, often leased. Can they really afford them? In at least one case, I know they can't -- one of my neighbors confessed recently that her husband declared bankruptcy last year. Yet the last time I saw her, she was driving a brand-new SUV. 

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