Saturday, December 6, 2008

Proactive Spending in A Bad Economy

Okay, things aren't getting better in the economy anytime soon folks.   Sure, everyone knows this, but sometimes I'm not sure that people really know it, if you know what I mean.    What I mean is, we're not going back to business as usual.   Not for a long time.   I think 2009 is going to be a long, tough year for many.  

The company I consult for went through a round of layoffs this past week, and more are coming. So far I'm safe, but we'll see how that goes.  My current goal is to make it to my maternity leave in March, and I think that's a reasonably safe bet.  After that, I have some prospects.  Still, things are getting scary out there. 

A result of the shaky economy and all the job cuts is an absolute reluctance to spend on anything nonessential.  But there are some things worth spending on if you can.  I call it 'proactive spending', or spending money in order to save some or be prepared for the worst.

Here's our list.

1. Firewood and heating oil
We're heading into the coldest months of the year in New England, and ensuring we can stay warm is a top priority.  Right now, home heating oil is cheaper than it has been in a while, so we're making sure the oil tanks stay topped off.  Same for firewood - that's up in price, but we're ensuring we have enough to last us a long time.  

2. Car maintenance
This is something to stay on top of when you are currently employed.  We're making sure all our maintenance is up to date  - we always do, but now it's even more critical.  And keep that gas tank full too.  

3. Insulating supplies
We live in an old, drafty house.  No getting around it, there's a lot of heat waste going on.   So while we've cut back on home improvements, this is one area that's still getting funded.  4 new basement windows are at the top of the list - we can feel the outdoor air blowing through the current ones in one area of the basement.  I'd love to do the windows in our bedroom as well, but for now we'll just caulk and seal as best we can.  

4. The pantry
I'm an advocate of a stocked pantry.  Now is the time to fill the pantry, freezer and cabinets with a bit of a stockpile.  A while back, Liz Pulliam Weston on MSN Money wrote a great article about the emergency fund you can eat.
How much and what you stock is up to you.

5. Retirement
I hear from a lot of people lately the desire to stop putting money into the uncertain markets. But just don't listen.   Save as much as you can, as often as you can.  Don't ditch those pretax withdrawals or the employer match.   You have the opportunity to get good stocks cheap.  Find a good solid mutual fund by reading ratings at and stick to it.  

6. Family gatherings
Christmas will be a little less generous this year, which is fine with me.  But we're still spending to see family (and friends!), even if that spending is more careful.  Relationships are worth it.  

No comments: