DOWN TO EARTH SIMPLE LIVING FORUMS

DOWN TO EARTH SIMPLE LIVING FORUMS
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27 September 2012

The GFC and learning to live with less

Before the global financial crisis (GFC) started in 2008, there was rarely anything in the press or on TV about budgeting, going back to basics, frugal living, simplifying, living within your means or anything much outside the consumerist norm. Well, times have changed us, and not only do I think significant change has happened, I think for many of us, this way of living makes so much sense, it is here to stay.



Now I often see magazine and newspaper articles as well as TV news and current affairs segments on thrift, budgeting, saving money by shopping wiser and where to get the best grocery prices. I have to say, I wonder why it's taken a world-wide financial collapse to bring us to this point. I think these topics would be useful all the time, but still, I'm grateful for the information we get now. I think these snippets of info are really helpful to all of us but especially the younger readers who have grown up believing that it's fine to spend on whatever you want, regardless of whether you have the cash to do it. Paying by credit card is so easy and often it's only when people are deep in debt that they realise how much damage has been done and how much work will go into getting out of debt. Often it takes years.



Not going along that debt pathway in the first place is the wisest option. By moderating your desires and practicing frugality a wonderful life can be built that gives many of the good things you work for but also the free time to enjoy it all.

The downturn in the economy caused a lot of unemployment and unpaid mortgages but significant gains were made from it too. It revealed to us that we can live well on less, and often having more reduces our enjoyment of life because we have to work more to pay for it. It taught us that genuine satisfaction comes not from comparing ourselves ourselves to others and gauging our worth by having more, it comes from creating an authentic life that is lived according to the values we cherish. 



But there are choices to be made - and those choices are critical. You can choose a new house with a high mortgage or a modest home with a more realistic mortgage. You can choose to buy furniture you can afford, not what your friends have or what you see in a glossy magazine. You can choose to stockpile, make your own cleaners, cook from scratch and hand-make your life or to buy all your wants and well as your needs. Each of these choices will determine how much money you need to live the life you have chosen.


The choice is yours but if you choose the frugal option, you will have more time to enjoy what you have. I think that is one of the best things to come out of the GFC. It has shown us that there is an alternative to what modern life had become. It has encouraged us to examine life and make changes, and it has moved many of us towards a more sustainable and simple way of living. The financial downturn has been effecting life world-wide for a few years now and it's given us time to settle into new patterns and routines. For many, it has forced change that may not have happen otherwise and for others it has brought more people in line with how we're living.

How have you been effected by the GFC? Have you seen some good in it?



39 comments:

  1. Oh yes, it's had quite an effect on us - accelerating the path we were already heading down, in many ways. I also quit working outside the home a couple years ago, which many saw as counter-intuitive, seeing as the economy was (is) in such poor shape. It was a leap of faith, but we are getting by and making do, and it feels very right to me. I often think about those who are really and truly poverty-stricken and wonder how they are managing - I hope one of the positive things to come from this crisis is that more people can empathize with those in poverty and find ways to help care for them. (That's been my realization, anyway, that I'm very lucky to have food and shelter - everything else is a bonus!)
    -Jaime

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  2. We have been lucky enough not to be affected by the GFC at this point, but we know people who have.The people who have been affected badly have been the ones who liked living a lifestyle beyond what they could afford.
    Yes, I have noticed the articles regarding saving money too. Some of them make me laugh though, I read one article telling people to save money by hanging their clothes on the line instead of putting them in the dryer ...I was astounded that people didn't know this -how times have changed.
    I thing the GFC has taught people to be more frugal and to realise what is important- not such a bad thing!

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    1. Hi Kim,

      I also laughed at the "tip" of drying laundry outside rather than in the dryer. We live in Canberra and still can do without one and that includes using cloth nappies. A few years ago a relative from the UK came to visit and was horrified at the "marks" on her washed clothes. My sister told her they were peg marks from the clothesline and we learned that this was the first time she hadn't used a dryer (and was probably the last, given her reaction!)

      Have a lovely day!

      Sara

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    2. Oh my. That's kind of scary, to think that they have used a drier constantly, all their life. We use to have a drier, we used it when the weather was bad, but it eventually gave up the ghost. We now just use clothes horses when the weather is bad; it works fine.

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  3. We have always lived frugally, but with the downturn of the global economy these past 4 years, my hourly wage was cut, and my hours at work were also cut. That means tightening our belt, and going with the flow as best we can.

    I've always enjoyed cooking from scratch, making things, and love our little cottage on our 1/4 acre with out buildings, and gardens. We are debt free and it feels great.

    Your blog is a wonderful source of inspiration to me and many others.

    Hugs to you Rhonda and Hanno ~ FlowerLady

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  4. I am a stay at home mum, and my husband's income is now about 60-70% what it was previously. We've learned how to live frugally, and to live from the pantry when we need to. We are happy, healthy, and we just went on a skiing holiday. We now know how to direct our funds where we want them, and are not living pay to pay like we used to when our income was higher.

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  5. I was raised in a common sense, frugal manner and life changed after I left home. I've done the complete turn around in the past decade or two and now we spend very little at the shops and buy from local co-ops instead, as well as growing or making own own where we can. Not 100% of the time however as much as we're able to in our current situation. I recall how much I used to spend in a supermarket every week when my children were little; compared to now when we eat mostly organic produce, we are spending less per person nowadays.

    As to your last question, the good I see come out of the GFC is for many more people to look at their personal spending, maybe doing a budget for the first time, cutting back on excess purchases and finding they can feed their families on wholesome food for far less than what they may have realised.

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  6. Ah, I saw a poster recently that really struck a chord, just like this article has Rhonda:

    SIMPLICITY: Less stuff, less work, less expense equals more money, more time, more joy. Less equals more.

    Have a lovely day!
    Warmest regards, Miki

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  7. You are right we need so little to live well, I have found it easy since leaving work no travel fares, clothes or eating out money needed, we no longer have a car as we live in Sydney and the buses and trains get you most places and if we need to go somewhere that public transport doesn't go we ask our kids to take us that is rare. The weather is good here and I haven't used a dryer since my kids were in nappies now they all use disposables. We share the cooking, some things he does better than me.
    Merle....

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  8. Well said Rhonda.
    We haven't been affected too much but I have seen a huge price increase in food. We now shop via a co op which allows me to buy in bulk and it's organic. I also buy at the local farmers markets and we have an ever growing vegetable garden. So I don't have to rely on the supermarket as much as I used too.

    I feel everyday we are doing something to simplify our lives even things like saying no to buying the latest whatever!

    We have a fairly tight budget as we put nearly everything into our mortgage so instead of a 30 year mortgage hopefully it will be paid off in less than half of that.
    I think learning new skills like growing food, preserving, cooking, budgeting etc is a worthwhile investment for our future.

    Your blog and book have taught me quite a lot Rhonda now I am teaching my daughter these skills.

    Blessings,

    Melissa

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  9. My husband and I have been moderately affected by the GFC, not as much as our family and friends though. We worked really hard during the good years to sock away at our mortgage, forgoed the latest gadgets, fashions and expensive holidays. At the time, our friends and family openly delighted in calling us "tight", it was a running joke. And it is sad now to see them waking up to a huge reality check, while we are still able to live reasonably comfortably. However, the important thing to note is that the way my husband and I live would still be unsatisfactory to them. Whilst they have had to make changes their spending patterns still far exceed ours. I am very happy in our little world growing vegetables and fruit, making as much as possible from scratch (with more on the horizon) and having our children in cloth nappies (my husband's cousin openly called me an idiot for doing this!). We still have room in our budget to tighten our belts more if the need arises.

    Sara

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  10. Here, here Rhonda. People only seem to change after a crisis. The GFC was certainly a big one, and was cause for many to reassess.

    I have managed to survive four staff restructures since Dec 2008, however many long time friends have been effected and have lost their jobs. Many have told me since that it was the best thing that could have happened to them as it gave them a chance to reassess their lifestyle and goals.

    Personally, I am continually checking progress against my long term financial goals, by reading back through my blog to keep on track.

    Whenever I feel disparaged about my current situation, I look back at all the great cost reduction and cost avoidance projects I have completed.

    Apart from our small mortgage, which we are paying down rapidly, we our cost of living is very low. We did this on purpose, partly because of my greening, but also in case I lost my job (touch wood).

    Gav x

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  11. Wonderful post, Rhonda. May I say that the last couple of posts have had a different mood to them- there's a subtle shift with more energy and proactive topics. Very empowering. I'm loving it.

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  12. What you have said is so true Rhonda. We have not been affected by the GFC but certainly it is unsettling, the uncertainty it has brought to life. We have spent the majority of our married life on one income and budgeted accordingly, only spending what we have and not relying on credit only after past experience for which I am grateful for. I think that overall people know that they can survive on less, that the basics are ok, and that growing your own things is really very rewarding. Also simple times like going to the park and just being together can be some of the best times. it doesn't all have to be about spending money. Catherine.

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  13. Like some others here, I've always lived frugally and debt-free (it's genetic). I'm one of the weirdos who always wishes interest rates would go up (to earn more money on my retirement savings).

    Overall, Canada has remained fairly protected from the GFC, though Canadians carry a lot of debt (mostly mortgages).

    The only thing I notice during economic downturns is more people at the thrift store and more (often silly/frivilous) "thrift" tips on mainstream websites. Just like greenwashing for the environment, there's lots of thriftwashing for saving money.

    Great topic!

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    1. That is so true about more people at the thrift store! I've also noticed prices going up there (maybe because of the "thriftwashing" or the increase in buyers?). Half-off day is especially crowded lately.
      -Jaime

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  14. Wonderful thoughts! My husband retired last January, and we have had to cut back drastically! It has not been as hard as I thought it would be, as we already live frugally and have for many, many years. So many problems could be avoided by budgeting and living within your means. I think that living within your means is the only way we will make it in this scary economy.

    Hugs,
    Barb

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  15. The recession has hit so many people hard. I agree though, by cutting back and living more simply, can give you a far more rewarding life than a materialistic 'keeping up with the Jone's' life can ever give.

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  16. The warm fireplaceSeptember 27, 2012 5:40 pm

    I have seen a huge shift in peoples way of thinking, we have personally been effected as my husband had a feeling his firm was not doing well and got out just in time, we have had to have a much reduced income and has made us really think about how we spend the money we do have, we have no mortgage or debt which helps alot, plus we brought 3 1/2 acres before it all went wrong, this will be our saving grace to be able to grow will make a huge difference to our budget, living more simply and not getting caught up in the materialistic side of life feels so much better.My next challenge is Christmas how do you buy people gifts when theres very little money? My husband says to use the skills i have and make some the rest will be reduced and thoughtful things, i think Christmas is the time when poeople are more likely to spend what they dont have, would love your thoughts on that at some point Rhonda.Loved your post on stockpiling and todays makes you think and re manage things, your blog is so very helpful for those like me trying to pick our way through things.
    Sue

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    1. I have a problem with Christmas gifts, but slightly different to Sue's. We feel that we should cut down on presents and we now and again broach the subject with relatives.
      For instance, my MIL always gives us £20 cash each for Christmas and we can only afford to give her £25 worth of gifts. MIL always says she would like money for Christmas, but it seems ridiculous to me - just an exchange of cash gifts! We've suggested that we just buy nominal presents (£5 or under) but she doesn't want to do that.
      We also think that we should cut down in general on everyone's gifts that we buy. But I know for certain that my DIL would take offence and would compare what we give as opposed as to what her side of the family gives. Things haven't always been great with DIL so we don't want to rock the boat.
      Part of the problem is that when I married my husband 4 years ago, I had a small home of my own. We sold my home and live in my husband's home and put the money from the sale of my original home in the bank. This in effect is part of our pension. My husband (being disabled) has a small monthly pension (half his original paypacket) that we live on quite well. Not rich - but then again not in debt. I'm sure that some of my relatives think that we are rich because we have savings and think that we are therefore tight-fisted. Not so. We have to live carefully (no foreign holidays, meals out, fancy jewellery etc.) and think to the future.
      I so wish that Christmas could be so much simpler. Just small, thoughtful gifts for everyone. But everyone seems to have so much now, people don't seem to have to wait to buy anything.
      I, too would be interested in anyone's thoughts on this subject.
      Kate

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    2. You can always take the ultimate high road and give donations to Heifer International or the Mennonite Central Committee in people's names. They come with a nice little bracelet/basket/stuffed cow/card to give to the person on Christmas morning, and they really make a difference.

      If that's too much of a change right away, the formula I like goes: "Something you want, something you need, something to wear, something to read." This can be, for instance, 1) a nice chocolate bar 2) a chain for eyeglasses 3) a pair of handknit socks 4) a used, but hard-to-find and in great shape book. Frugal gifts don't have to look cheap or chintzy.

      And there's of course the blunt route--you simply come out and say, "I'm afraid all we can afford this year is X amount per present, our pensions and investments are not doing as well as we want them to. We don't want anyone to feel like they are obligated to give us more, we know times are tough all over." Not a fun conversation, but it can cause a lot of relief sometimes too, for everyone.

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    3. Many years ago my mother (now 85 yo)suggested that we should no longer buy Christmas gifts for the adults in our extended family, only for the children, because by then there were too many adults, with all the SIL's + DIL's and grandchildren. Over the years that idea grew and now we only buy for our own children ansd simply get together for Christmas lunch, everybody contributing something so that no one person has to do/provide everything.

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  17. In Portugal the situation is different. At this point, most of us are living with really less money then 5 years ago. Frugality is not an option, its imposed. The best thing is, the family is again on top off the list for "normal" families, but the other side off the coin its not so nice. If the portuguese children were not suffering I would say this was an opportunity for for change, however, a lot of them are going to school with no food in their stomach, or their parents have no money to buy school books, or with summer cloths in winter, etc. Changing is nice but I wish it would´nt be so drastic. Celia

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  18. I've been a stay at home mom for nearly eight years now. It did not make any sense to return to work after my second baby and spend $50 more than I made in gas and babysitting so that I could be gone 10 hours a day. My husband has a good job and was raised to save and pay off debt each month. I was not. Bills weren't real until they called you to ask for the money. Buying things was a fun activity after church every week. My husband and I struggle with this difference in the way we were raised often. I love to shop, it even calms me down. We are saving for him to go back to get an advanced degree, his company will pay for the schooling after the grades come in, so naturally my husband wants to have a years tuition put away before we start. One trick we have learned is he does the shopping. I simply can't walk into a grocery store and not buy too much. So he handles buying the food and I try very hard to not make extra trips to the store if he doesn't get something or i suddenly need something. Over spending is still something I struggle with, buy now it is at craft stores and I give the items I make away as gifts.

    I think it is very important to choose to be at home or choose to be at work. I struggled for a while, after the newest wore off, with feeling like I was a waste or that I had to justify staying at home. The economy did not do this, the job skills and education I have did not force this on me, I chose to have children and raise them to build a family and care for it. I did notice that while I was finishing my degree (last year) the other students were plagued with what they were going to do come graduation. In some ways I feel like I am waiting the economy out and in other I feel so much more fulfilled than I did before I made this choice.

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  19. Oh yes I have seen changes for the better. Being frugal is not seen so much now as being a 'scrooge'...I think many more people respect those who choose to not squander the Earth's resources...upcycling is seen as 'cool' too! lol

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  20. We got married in 2008 and have lived very frugally ever since, to enable me to stay home with the little ones. It has been immensely satisfying to live a debt-free life while all around us we see people sinking deeper and deeper into debt.

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  21. Sitting at my computer, I wanted to jump up and give you a standing ovation!!! Bravo, bravo Rhonda. I think your best post yet (and that is saying something).

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  22. We have done very nice the last few years. We have noted lots of others though struggling. They are new to watching their budget or not getting instantly what they want. That lifestyle never appealed to us. Since we always lived very frugally by choice and on one income we did not have much of an adjustment. I have always enjoyed reading and trying more ideas for living such. So our lives have always shifted and changed but we always felt it was for the better. We feel comfortable and would not change our lifestyle. There is always something new to try in the garden or sewing and such. It is so peaceful..who would want to not have peace? Sarah

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  23. Unfortunately it sometimes takes something like the GFC for changes to happen for the better. Luckly we haven't been affected by the GFC as such, but going down to one income several years ago helped us convert to this more fulfilling lifestyle.

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  24. The downturn hasn't affected me much financially, but last year I downsized because it felt right and have more money and more time to do the things I had wanted. My children and I learned from my grandparents, who lived through the Great Depression how to live frugally and the difference between wants and needs. The most telling to me that my boys got the message was when my youngest and his wife were looking to buy a home. People were telling them that they could buy a home 2 times their annual income. That would have put them in a home much bigger than they needed. My son was adamant that he had no intentions on doing that. He knew what price range he wanted, it was a quarter of his annual income. He's happy now he listened to his gut because his wife, who left work to have their first child, can afford to stay home with their daughter even though he recently took a cut in pay.

    People hopefully will learn from this downturn and look to live within or below their means and to find satisfaction inside themselves and not from material things.

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  25. Dear Rhonda,

    After many ups and downs my husband and I have realised the simple life is the best life. We have learned to live on a small budget through previous job losses (my husband is a contractor and I used to live on a very small wage). Now that we are earning a lot more money we are still living frugally and looking to pay off our mortgage in 5 years. Rhonda you have been a huge inspiration to my life and I thank you dearly. My family has benefited so much from your blog.

    Jess

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  26. Once again, when I'm feeling down I visit your site & it brightens my day. I think seeing so many people's "nicer" things tends to wear on me after a while & I start wanting new furniture and other material things that aren't necessary. We do live rather simply, but our main expenses lately are gas & groceries. Here in the U.S. that's where it's gone up tremendously. My husband also took a cut in pay when his job of 17 years shut down last year. It's not been terrible, but lately it's really affecting our bank account. I've been forced to start to budget again & the money just doesn't go as far no matter how I spin it.
    We do have a garden but it doesn't supply everything. Animal feeds have gone up too & I've decided it's time to replace our chickens for new layers as our ones now aren't doing a thing.
    The next thing to go will probably be satellite tv as this is no necessity and we can get most of the info from the internet.
    I don't know how it works in Australia, but we are also dealing with the uncertainty of our taxes going up and being forced to buy healthcare insurance so this will be another drain eventually.
    I will be visiting your site much more to try to get some tips & encouragement. Thanks for your posts!

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  27. Rhonda, Where do get the lovely hanks of organic knitting cotton yarn? (shown this past week) I live in Canberra.

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    1. It's from one of my sponsors that I'm proud to recommend - ecoyarns.com.au

      This organic cotton is some of the best I've knitted with. It knits up beautifully, there are a wide range of colours, and as the icing on the cake, Vivian shares this info about the women who produce it: This yarn is made by a Peruvian women'e cooperative that has a Fair Trade application in progress. The women come from the poorest localities in Lima, and are given Fair Trade conditions, including masks and arm protectors while spinning, good pay, and a litre of milk a day as a nutritional supplement. The money that they make helps their children to obtain an education.

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  28. I agree with some of your comments Rhonda. We have been hit hard financially by the GFC in terms of a total eradication of savings that were accumulated by hard work. There is nothing good about that. We have had to adjust our lifestyle as I am home full time with two small children. We were counting on savings to see us through this time but instead they are vastly depleted. We make do and still have a comfortable lifestyle and it has made us think about how we use our money. Like anonymous I saw a lovely card a few weeks ago that said "happiness is the place between having too much and having too little" this resonated. The thing is though we were well established in our own home and I have access to the internet at home to read blogs like yours. Many people were maybe just starting out on the road to home ownership or were renting and with reduced incomes and savings the struggle becomes how to keep a roof over their family's head. Many do not have access to internet in their homes because they can't afford it so they aren't able to share how the GFC has affected them and make themselves feel it was all for the greater good. I think our planet is appreciative of the GFC as I think it has made many people think about how they spend money, expend energy and use their cars and that has got to be a plus. But for many the GFC has meant just more day to day struggles. I think we need to be mindful of that.

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  29. I love this blog! There are so many useful tips and info I am slowly picking up and adapting in my own life. Thanks Rhonda, for your inspiration! I would like to make one observation from the pictures you put up on 27 September, if you have no objections? It's the one with the kitchen caddy attached to the drainer. I notice that you've stored your knives upward facing, and would just like to mention that my mother once did exactly the same - that is until she had an accident in the kitchen one night, in a rush, and inadvertently crucified her hand to a knife facing upwards in the caddy! She underwent many long and agonizing months in therapy, so understandably I have an acute aversion to this lurking danger in the kitchen and a need to highlight the potential hazard. I do hope you don't mind me drawing attention to it? H :)

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    1. oh my! This has certainly has made me think about knives. I cringed when I read your post! your poor friend, thanks for raising it

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  30. I love your blog. It is one of my regulars that I always visit. You always make me slow down and breathe. I feel calm while I'm reading your posts. I hope to have a beautiful blog and life such as yours one day. Please keep on doing just what you are because you are an inspiration! Thanks!

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  31. I just found your blog and it is just what I was looking for. The info is great. Even though I have lived frugally for about 45 years, there is still so much to learn. I really enjoy hearing from all the other people. It is nice to know others are in the same boat. Keep up the good work.

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