Tuesday, March 09, 2010

The Underground Economy, Part 4

I hadn't planned a "Part 4" but realized yesterday that I needed to explain a little more about the original book which changed my way of thinking.  A comment was made that the term underground economy could make one appear to be avoiding taxes (although they knew that was not what I was writing about).

In a way, that was legally what the author was doing when the book was written.  At that time, inflation was (so it seemed) out of control, interest rates were around 17% for banks, and he found his paycheck was being eaten up by what was happening to the economy combined with higher taxes.  He actually came out far ahead by lowering his income (thus, his income taxes) and finding ways to live on less.  The surprise came when he found his new lifestyle was beneficial to his family and they lived quite well and they never returned to life as it was before.

When my husband lost his job in Detroit (a long story that I've told before but basically a result of 9/11), it started our second year in which we ended up with little and then no income.  We had to apply for state aid so I could receive free insulin and doctor's care (which was excellent in Michigan).  We had a few conversations with the woman we had to go through at the state agency and I'll never forget what she told us at the time... that the middle class is always hit the worst in an economic decline (and this was before things got really bad in Michigan).

She explained that the poor already had the skills necessary for living on little and they knew where to get help.  The rich usually do not get to the point they need help.  We have learned a great deal since that time as my husband ended up having to go on Social Security Disability.  While he was able to work at Lowe's for awhile after Detroit, he was never again able to work as an engineer (and eventually not able to work full time as he can have months at a time when he can hardly get out of bed).

That's why I believe it is an excellent use of time to learn basic skills and put in place habits and expenditures before one would ever need to live on less.  (My own opinion on the economy... based on what I've read from people I trust... is things will eventually get worse and we'll see high inflation.)  If one only knows how to live by depending on a high paying job, buying what they want at the grocery store, eating out all the time, spending weekends at the mall, expecting a big vacation each year (we once had neighbors who took at least three big vacations a year), wearing the latest styles, buying the latest technology as it arrives, etc., then should they find themselves living on less (or nothing) they have no survival skills at all.

If you already know how and where to shop off the financial grid for less; have a back yard garden if possible; have invested in skills like cooking from scratch, canning, sewing, deepening a pantry, using herbs, growing flowers, quilting, soap making, candle making, carpentry, plumbing, etc. (not all of them and not all at once, of course)... then should you be in a place where there is a major loss of income... you are far better off than others.

Not to mention that the very learning and using of these skills form a lifestyle which is enjoyable should one never have a financial reversal.  To be honest, if hubby and I were younger we'd enjoy moving further out in the country and become even more self sufficient.  Since life is not perfect (and our 2/3 an acre is enough to take care of), we built a raised bed garden and planted rhubarb near the fence line.  We started a small compost pile a couple years ago.  Small steps providing huge rewards.

We don't have to wait until circumstances are perfect to begin making lifestyle changes and we don't have to wait until The End of the World as We Know It (TEOTWAWKI) to be happy we made even small steps which enable us to lessen our dependence on the financial grid.

We become better only by the doing and we can do only by the beginning.  Whether it is a domestic skill, or gardening, or making our homes lovely with thrift store finds... it is a good journey.

Picture: Three Hens; allposters.com


The Working Home Keeper said...

Last year, our income was cut in half when my husband lost his job. Having my income helped but I also believe being debt free, having savings and knowing the skills for living on less (thriting, meal planning, cooking from scratch/pantry, etc.) also kept us thriving despite the loss in income.

To some it seems odd that I shop at Goodwill and want to beome more versed in all things domestic - I guess since we are a two income family. But just because we have two incomes doesn't mean we have to spend everything we earn, right?

Mary Ellen

Mrs.Rabe said...

This is where we are too Brenda...we live on one income, home educate, have five kids still at home...we learned alot of 'simple' living skills when we were training to be pioneer missionaries 20 years ago. I am learning though about gardening and we are going to do some raised beds this year. We try to keep expenses down and the only debt we have is our mortgage, yet we still are not rolling in the savings...we are working hard to be good stewards of the blessings that God has given us.

Connie said...

We too have been living more frugally the past few years. We are both retired (my husband works 2 days a week) so we find that our SS is quite suffcient for us. We find that now we are able to be helpful with our giving and helping those who are having a real struggle in their life as it is today. We enjoy helping others and are thankful the Lord has blest us so we can. As we age the worlds "things" do not have a hold on us like they once did. I enjoy your posts very much.

Dee/reddirtramblings said...

Great information. I can't wait to read parts I thru III. Beautiful blog BTW. I found you through Sharon Lovejoy's blog.~~Dee

Anonymous said...

I have shopped at Goodwill for years. I have very nice clothes. You don't have to tell people where they come from. Many will just turn up their noses!

Cathy said...

So true. We saw the writing on the wall almost 3 years ago. I had a 6 figure income and my husband made about half what I did. I have always believed in buying used first, cooking from scratch, canning and mending. My friend described me best when she said I had "a pioneer spirit" I am so grateful for the skills my wonderful parents taught me. Blue collar and simple but happy and content. I lost my job one year ago. And we are doing fine! We saved when times were more prosperous, paid off debt and have just our mortgage now. I started a company (a dream!) 9 months ago and it is doing well too! Sometimes "the worst" can be the best thing that could happen. Corporate American is very unkind!! I love my life and find beauty and things to be grateful for everyday.

Cathy said...

PS: Mary Ellen Wonderful thoughts and Mrs Rabe you too. I believe we are all the better for it.

Terra said...

You have a great attitude and successful actions in doing well with less, and being productive. Growing food is one very productive activity.
I agree that the middle class takes the hits.

Sharon Lovejoy said...

I agree. We've all suffered a lot since 9/11. My magazine was hit by people not advertising. The doors to Country Living GARDENER closed in 2006 and there is nothing to replace it. Lots of my friends who are writers and photographers mention that there just aren't venues for work any more. But, we MUST learn to live on less, to live more simply, to grow food, and here's my passion, cook with solar ovens. They're fabulous and food never burns. I got mine at Solar Cookers, International. Oh, and then there are the red earthworms for recycling garbage. And who are those people walking around with all the big bags from fancy stores??

All best,

Sharon Lovejoy Writes from Sunflower House and a Little Green Island

Anonymous said...

Good encouragement here, ladies...thanks to all the sharing!! My hubby is working at a good job, but cost of living here is so high...and we see that it is possible because of health he may need to retire ere long...but we are trying to be more careful and thrifty before that day approaches.
Blessings to all,

Pen Pen said...

I really enjoyed these posts. I am with you 100 %

Lisa Z said...

Thank you so much for this. You write about this so beautifully, without any of the fear that others seem to promote. You are right that any life can experience troubles, as you know from your own past. And the way you and your family have handled it so graciously is very inspiring.

I enjoy the comments today, too. It seems many of us are in similar "boats". My husband is a public school teacher and while costs of living (esp. health ins.) have risen exponentially, there is no money to pay teachers even a tiny bit more. We are blessed with so much, and we can do it, but it does take work and planning to learn to live on less when we didn't have "much" to spare in the first place. Still, we continue to live a lifestyle that many would love to have and so I give thanks daily.

I think things will get worse before they get better, too, but better to be prepared than not. Getting out of debt is very important for that, as someone else said.

Lisa in MN

Vee said...

I enjoyed reading your post yesterday and have come back to read your wonderful comments. Lots of supportive readers you have with some wonderful suggestions and tips of their own, not to mention the sharing of their stories.

Carrie Schmeck said...

I so agree with your thoughts that those of us who already know how to live frugally are better off when times are tough.

My daughter has discovered this as a college student. She has actually thanked me because she knows how to "live small" when her roommates are struggling with their measly "allowances" from home (that are $$ more than hers which is 0).

I think much of it comes naturally for me and I am glad she got the message but it reminds me to step it up with my boys. Thanks!