17 September 2008

Squirrels unite

Hi everyone. I'm fine, I've just had a couple of hectic days. :- )

We live in troubling times. If you've been reading the newspaper or watching the TV news you will know about the collapse of another American bank and the possible collapse of the American International Group, the world's largest insurance company. The problem with these financial troubles is that is affects investment, superannuation, pension schemes and 401(k) plans all around the world - in Australia the demise of Lehman's bank knocked millions of dollars off superannuation funds and the stock exchange.

Even though we may seem removed from the goings on of big business, it has the potential to really impact on our daily lives. We need to be cautious. While it's impossible to write a post that will cover everyone's situation, I think, in general, it would be very wise for all of us to think carefully before we spend on any non-essentials. It's time to go into squirrel mode - we need to be saving our money and conserving our resources. There are tips here for buying groceries and here for living on a budget. We've talked about these things before but it's often helpful to see a new perspective.

Overall, I think it's a really good thing for everyone with debt to get really serious about paying it off. Forget your credit card, now is not the time to add to your debt, you need to pay it off. If that seems like too big a task to make much difference to your everyday life, there is a smaller thing you can do while still paying off your debts. Start an emergency fund. Try to work out a saving strategy for yourself where you stop spending your "spare" money and instead, save it as a buffer. If you can save all that money you would have spent on gifts, magazines, new shoes and clothes, craft supplies, holidays and treats, you will soften the impact of future financial problems. If you have that cash to pay for all those unexpected thing that seem to crop up in everyone's life, you won't have to put more on your credit card and you can continue to pay off your debt. If you come into a windfall, or save extra money, pay it off your debt, it makes a big difference and in the long run will save you a lot of money in interest.

And what do you do if you have no debt, or a small amount of debt? You continue to do what you've been doing. We all need to be careful now. Continue to shop for groceries in the most frugal way possible, continue to save what you can, be aware of the unstable financial situation in the world right now and spend only on essentials.

Squirrels unite! We are all in the same unsteady boat. No one knows what the coming months will bring but if you make a few preparations now you'll be better able to withstand whatever does come along. If you've never been serious about saving before, now is your time. Step up and own any financial problems you have, start paying off your debt and move toward a more independent future.

The American site Dave Ramsey and the UK's moneysaving expert are both excellent resources that could help you create your own financial plan. I would also encourage you to read Your Money or your Life.

Tomorrow I'll write about cutting back on Christmas spending and handmade gifts.



  1. Wise wise words Rhonda I don't think people relaise jsut how fragile theworld economy is at the moment.

  2. Rhonda,

    Hello! What a weekend we had here in Ky.

    We had some high winds from hurricane Ike the winds knocked out many, many homes power lines. We were one of the blessed ones we have electricity but so many other don't have it.

    We went to the grocery on Sunday and the power was out there all that wasted food...But do you know what everyone was doing eating out you couldn't find a place to eat.

    They have told many it might be week before all electic will be back on...what would happen if it would longer than that?

    We have started thinking... what would we do if that happen to us? We are going to start putting back items that could be used later on emergency items.

    It is truely scary times...We are trying to add to our house payment each month and adding no debt. We are going to build a greenhouse so we can start planting earlier. This might cost a bit now but it will help in the near future. We are paying cash of course:)

    Many Blessings,


  3. Yes it is worrying times Rhonda and those of us who are old enough to remember previous recessions should be aware if the repercusions of this weeks news.

    After the recession of the early 1990's my dh refused to move house as the thought of negative equity terrified him. Right now I am glad he made that decision.

    We live simply now and have lowered our bills and are paying down the mortgage, our only debt left. We have also put off any further house improvements for the time being. I do worry about the situation for our son and daughter though.

  4. I am happy you are fine Rhonda! I was a little worried about you when you didn't post yesterday, after your recent bad run. I live in Cinci OH, and like Renee (herbs and me) have been mulling over what we would do in a real emergency! With 5 kids from 11yrs - 1 mth old, we have a lot of responsibilities. We are some of the few blessed ones in our area -- lost some roof and some trees, but our power was restored within hours -- although our neighbors on either side and across the street still have no electric, two days later. We do need to be prepared...and to trust in God's protection! Fortunately the only debt we have is our house, and it is almost paid off, so we are in a better spot than most people. Thanks as always for your thoughtful posts.

  5. Wise words, as always, Rhonda. I'm on a low income, I have no debt and have low living costs and I believe I really am one of the lucky people right now. I've prepared myself as well as I can, built up my stores and have alternative cooking and lighting if needed. On the moneysavingexpert.com forums we have a thread 'If things get tougher?' - its scary to see how things have got tougher whilst we've posted, particularly over the last couple of months.

  6. I love this post Rhonda. I think there is a very serious downward spiral happening. If it wasn't for credit cards and lending schemes it would be no different to the great depression where everyone was forced to barter, grow their own food and cook from scratch.

  7. You're right, you're right. Save, don't spend and batten down the hatches. Just because we can doesn't mean we should spend money and keep accumulating stuff that we don't really need. Advertisements, the media and marketing in general have had way too much power of this little black duck for too long. Time to make a stand.

  8. Hi Rhonda,
    What a timely post! I'm now a stay at home grandmom, I watch my grandson while my daughter is at work, and I need to be serious about my spending habits! I went to the grocery store the other day and was going to buy some cookies, well....they were priced at 3.50 and up, what a shock!!!!! I love to bake so guess what?? I'll be baking our goodies from now on. My husband plans to retired in two years, so for him to do that I have to watch all our pennies. I guess that makes me a proud member of the Squirrel Away club!!!
    Keep up the good work with all the frugal ideas.

  9. It is very scary but the Federal Gov. will bail out AIG - it has no option- but I heard today that Morgan Stanley and Goldman Sachs will be gone in another couple of months - very scary stuff - it is not often we here how it affects the rest of the world.

  10. My daughter and I were just talking about what is going on when she called this evening.

    We're both "deepening our pantry" and they decided to pay cash to get a much needed fence installed (with four little children, it was needed).

    They decided not to go into debt for a home improvement project right now. It can wait.

    I've been watching twenty-four hour coverage regarding the financial crisis. Well, it is on twenty-four hours but I don't watch it but off and on.

    It is quite frightening to see how the government is using tax payer money to "save" so many of these companies who got themselves in their own trouble through greed and stupid gambling practices.

    My great grandchildren will be paying for this if they keep on.

  11. I am so excited to find this blog. We live in East Texas and were affected by hurricane Ike. No damage, but out of electricity for several days. We have felt a need for some time to prepare for harder times by stocking up and looking for energy alternatives, but being in this storm has given even more reason to get busy. With stores closed everywhere and water not drinkable it really makes me think; what if FEMA wasn't coming with food and water? If there was a nationwide collapse of some sort we would be on our own. So my husband got busy today and bought the materials for square foot garden beds. Cathy

  12. Interesting post! I didn't realize how Lehmans, AIG et all affected the rest of the world. I just thought our economy was impacted.

    Yes, times are bad and people should be saving their money but I really think alot of people just don't believe it (unemployment etc) can happen to them (until it's too late).

    We have no debt except our house and I wish we didn't have that! I'm paying that down as much as we can afford every month. I don't know how we'd manage if we had credit card debt.


  13. I keep wondering how much more I can do to conserve. I live as simply as I can now, have reduced all my monthly bills to the bare minimum and spend only on food gas, bills and rent with no extras.

    I have no investments, so that's not a worry I face and just a small savings account.

    I think those of us who live simply will fare better in the long run.

    Thnaks for your words of wisdom.

  14. Hi Rhonda, boy do I agree with you! A friend and I were just saying that we have had trouble findig brands we have been buying for ages in our local stores and the prices just keep going up weekly on the same things. Another curious thing is our federal government in the state has purchased all the canned butter that has been shipped into this country as well as a number of freeze dried supplies are no longer taking orders as they orders as far out as 2010. http://www.internet-grocer.net/butter.htm
    What is that all about???

  15. Hey Rhonda I just made my first batch of cold pressed soap and I think I put too much Caustic soda in it it came to trace really quickly, and it is sort of crumbly - is there a way to save it maybe remelt it and add more oils???? or can I grate it and make the other kind of soap with it???


  16. Thanks for the good words Rhonda. We are all in the same boat. We have worked for years to reduce debt and at last, have won that battle. It wasn't easy, but threatening bad times like these make us realize it was worth it. There will be rough times and unpredictable shortages for us as well. But we'll be stronger and better able to cope.
    We're still learning to be more self-sufficient and pay very close attention to your tips and links. Thanks again for keeping a thread for all of to share.
    Squirrels Of The World Unite! JudieJ

  17. Rhonda - you really have me thinking. My husband and I are spenders and hate to admit wasters at times. We have credit card debt, mortagage - but no car payments - thank goodness. It is time to buckle down and stop spending money like we do. I need to begin to stop and think - do I really need that autumn decoration or that bracelet or those shoes...I recently started working fulltime to help contribute to the household income and was going to save for new furniture and household items and redecorations...I think maybe I will start squirreling away some of my pay for a rainy day instead.
    I can't wait to see what you have for us for making Christmas gifts and such.
    You really make me stop and think, Rhonda... and I thank you for that.

  18. It has been crazy here in Texas the last few days. Even here where we only got swiped by Ike. Seeing how the stores were running out of supplies and gas two days before was shocking for me. I felt blessed that we didn't need supplies. They were already stocked up in my home. It is indeed time to put away and make changes.

  19. Rhonda Jean,
    Your post today was so on target. Our economy in the U.S. is getting a bit out of hand. I shiver to think that three years ago I had a mortgage on my house with Lehmans! I ended up with another mortgage company when they 'sold' my mortgage to another company. Until that happened I never knew that these companies buy and sell mortgages back and forth. I've never been a credit card user and have taught my children that those plastic cards can be the beginning of financial troubles. I've always had a garden, cooked and baked from scratch and sewed a lot of our clothes because I was taught those skills at home as a young girl. Now I'm teaching others to sew, cook, bake, preserve foods, fix things, etc. just as others have taught me. I don't think people in general understand how quickly disasters happen. Lost jobs, cuts in pay, ill health, hurricanes! The one area all of us can play a savvy game is within our homes. Just like you said...we must learn the skills to keep us independent, healthy, and to provide for our families. Being frugal in these troubled times is to be smart.
    So...count me in as one of your Squirrels United! Thanks, too, for letting us know how it affects others outside of the U.S. I knew it would create 'waves' but I didn't know to what extent. Hugs, Aunt Bea

    P.S. My youngest sister was a stockbroker for a number of years and worked with Stanley Morgan Co. I am so thankful that she decided after 'Black Monday' to change to a different kind of work!

  20. Hi Rhonda,
    AMEN,AMEN,AMEN!!!!!!!!! TO everything you said.
    Dh was laid off in April, We have cut back on everything! We would really be hurting if we didn't live and love living the simple side of Life!
    One thing thats been helpful to me ,is counting our Blessings over and over!
    One of our biggest hurt is no health insurance, our Home and car is Paid off and because of this we can't get help. The cost is too high to find coverage ,we've looked everywhere and cost is $2000 & Up per month.
    Tonight the Feds loaned AIG I think 80 billion to help them out.
    Hope you have agreat wk!

  21. Rhonda a beautiful timely post, I love your shared wisdoms & advice!It feels so good to have food in the cupboard, veggies in the garden & a rainwater tank plus making daily transitions to the simple life. Wish I had discovered it years ago but am loving it now, so thank you, thank you for all you share !! You mentioned hand made Christmas gifts, my daughter wrote this article on hand made slippers, very cute !

  22. Hi Rhonda,

    I do not mean to be disrespectful, but if every world citizen started squirreling now and not spend any money on non-essential items, a large part of the economy would slow down and the mess would be worse than it is is now.

    Of course I'm not saying that people should spend money they don't have. And I'm also not saying that it's a good idea to close your eyes to the situation. But every decrease in consumer spending will make the crisis at large worse, causing companies to be forced to lay off employees etc.

    So perhaps, if you have money to spend, now is the time not to invest in iPods but in greenhouses, like one of the commenters did. No new TV, but a composting or aquaponics system. Not a new tumble dryer, but a pressure canner. That will give new impulses to the economy even if the TV and iPod sellers suffer. And at the same time it'll help you become more self-suffficient and prepared.

    Anyway, just my two cents.

    Jandra from the Netherlands

  23. Rhonda Jean
    Yes I am truly glad you are OK! You've always warned us when you aren't going to be able to post and I personally was worried about you / Hanno's health yesterday. Whatever is/was going on, I wish you both good health and happiness.

    I agree with you and some of the comments here. Use your money wisely by investing in future things to help you like a greenhouse or polytunnel and not on frivilous items like a new set of hair straighteners. But I must say no matter how much we as bloggers preach, the world will never stop spending friviously and therefore the world economies will continue on.

    I also believe the finance companies, airlines and franchises collapsing is only the start of a very messy 2008/09.

  24. Great advice Rhonda :-)

    We have been listening to Dave Ramsay this year via podcast & read his book Total Money Makeover.

    We've got the first emergency fund done, we're almost out of consumer debt.

    I always thought a budget was constraining and "just not fun" but oh boy the freedom sticking to a budget has bought us has been wonderful. After thinking it would never happen we're finally on the way to owning our first home. (and start planting our own backyard food store ;-) )

  25. I rather like the idea of being a "squirrel".

    Next year after over 20 (consecutive) years I will not have a toddler at home so I am thinking of going back to TAFE and doing some study and working part time as an Assistant Nurse. Trouble is college will cost me almost $8000 money we simply don't have. I would love to stay home and bake and garden and run my alterations and mending business but with four more kids to go through primary and high school I think I should be doing some paid work to help out with our mortgage.


  26. Hi Rhonda,

    I cut up my credit card on Friday to help us get a loan for some land... We didn't need a big loan as we have been saving but being a stay at home Mum I had no income so they were going to refuse the loan despite our GREAT savings record. I thought that I never really used my credit card but it always seemed to have a couple of hundred dollars on it.... I feel so liberated now that it is gone! We live on a tight budget (obviously not so tight) but it is worth it... I am hoping we'll be debt free in 7-10 years and have the home of our dreams....

    Great to be inspired by your posts. Thanks again.


  27. Hi Rhonda,

    Once the savings have been taken care of (emergency funds etc) it might be worth looking to invest in some of the stalwarts of the stock market that are underpriced simply because of the credit crunch.

    Obviously, you shouldn't risk money you are not willing to lose and you should do your own research, but there are some bargains to be had on the stock market right now.

    Just remember that investments in the stock market should be held for the long term (minimum of 5 years, longer preferred).

    Just wanted to show that even in the current bleakness there is a silver lining.

  28. I agree totally with you Rhonda, we have been in squirel mode for awhile. My hubby is working in the midwest as you probably know, I do the budgeting and it's looking great here in 12 months the property is ours, we own the house we built on it so all is good, this week I was able to save 100% of his pay and guess where it has gone? Yes on the mortgage. Thanks for all your tips and for inspiring me to become more frugal and efficient. I have said many times but I do appreciate your knowledge. MUZZY

  29. Suzanne, I would think that the canned butter was for hurricane-affected areas, as it can be stored without refrigeration. I disagree with Jandra about spending on non-essentials being Bad For the Economy. It's only bad insofar as weeding out all the dodgy companies that relied on dodgy loans is bad. Buying and selling cr@p isn't contributing to an economy any more than "derivatives trading" did.

  30. I am very nervous about how this whole finanacial thing will play out. I don't have any cradite card debt, I don't have any investments, except for my (I guess it's a) 401K. I have no savings, because I make litle and barely make my bills, food and gas. I don't know how to cut back anymore, becaseu I have always tried to live as frugally as possible. Where do I start saving?

  31. Rhonda,
    Great post! My husband and I were on pins and needles yesterday and hardly slept last night as our retirement is with AIG. We thought we were going to lose everything. They've been bailed out but we are really taking a hard look at this situation and are going to go talk to our accountant to see what we can do to better "secure" our funds. We don't have much as we are small farmers. We scrape and scrounge for everything we have but it's acquired honestly and through hard work. We have a little debt that we are vigilantly paying off and we are progressively simplifying our lives. Your site and the comments from everybody really help us with the advice and tips. Thanks for all you do and God bless all of us! Hang in there everybody!!

    Kristina, Nebraska USA

  32. Hi Rhonda
    I was worried about you yesterday when you didn't post, so glad it wasn't anything with you or Hanno.
    Sorry this has nothing to do with your post but yesterday my daughter and her family landed in Sydney to begin their new life in your beautiful country.

    Pippa xx (UK)

  33. Dearest Rhonda,
    LOVE this post!!! My hubby and I are thinking the same. We have no debt except our small mortgage.
    We feel blessed to have savings during this unstable time.

    So glad all is well with you.


  34. The situation seems to be the same all around the world, Rhonda. We feel the instability and raising prices here in Israel, too. A friend from the UK wrote to me with similar news. Plus, we're facing unexpected expenses right now, which worries me. It seems that every month, something else is broken beyond repair, and something else needs to be bought. And there are baby expenses too, even though we're trying to go second-hand with everything possible. Oh well I'm starting to rant so I'd better be off... good luck to all the squirrels!


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