Times are tough for all of us! The last two years have been very trying between the virus and the inflation that we are seeing in our food supply and on many other items that we pay for monthly.
You have all seen the increases in food, natural gas, electricity, oil, propane, lumber, housing prices, gasoline, OTC medications, insurances, property taxes, and many other products and services.
I know some of you have gotten raises but will they be enough to keep up with all these increases? I doubt it. I believe that prices are going to continue to go up this year and possibly into 2023. I am already seeing big increases just since the 1st of the year. Many companies have come out and said they will be raising prices this month.
Most of you know that I am pretty old so I have been through times like this before. If you aren’t in the Baby Boomer generation, you probably don’t remember the worst time. The one that has always stuck in my mind was during the Carter years. Fed Chair Volcker, who served under President Carter raised the interest rates way up to 22%. Inflation reached 18%. I had a friend who purchased a home down the street from us at a 16% mortgage rate. Gasoline went up to $5.00 a gallon. We had gas shortages. We spent lots of time just waiting in line to gas up our car if we could find a station that had some. I even remember speed limits being decreased on some highways to 55 to conserve gasoline. The only thing that made any money was CD’s because the interest rates went up on them.
A number of you have written to me and asked me what to do with your money. I am not a financial advisor so I have no expertise in that field. We do the best we can with what we have learned over the years but even that is not guaranteed to work in this economy. So do your own research on it.
However, there is one piece of advice that I feel comfortable giving you. If you have any debt whatsoever, pay it off as fast as you can. The Feds said this week that they are going to start raising interest rates. When they start doing that, the interest rates on any outstanding money on your credit cards will follow. Any adjustable rate debt that you owe can go up depending on the terms. If you have a conventional mortgage your term is locked in. If you purchased a house at these lower rates over the the past couple of years, you are lucky and will have that lower rate for the life of the mortgage. Hopefully, many of you refinanced your mortgages while these rates were low.
But please, pay off those credit cards as fast as you can! If you are carrying large balances on them, it is going to really hurt when those interest rates rise! Don’t open any more! I have often talked about paying off your debt over the years. But this time, it needs to go or you will be paying a lot more to carry those balances.
President Biden and Treasurer Yellen, are saying they remember all of this from the Volcker years. We won’t let it get this bad they say. If you believe that, I have a bridge to sell you. I honestly do not know how they will get out of this. Just take a look at the debt clock for this country. https://usdebtclock.org/
I truly hope you take heed for your own good. If not, I tried.
10 replies on “If You Have Never Paid Attention To Me Before,Please Listen To This Warning”
Hi Precious! I totally agree with you about encouraging people to pay off any adjustable rate debt they have such as credit cards. The rising interest rates will make this debt harder to pay off. People don’t want to have their debt snowball so they can’t pay it off. I am so thankful our kids have low fixed rates on their homes. Our daughter and son in law have newer cars, so they should be ok for awhile. Son is still driving his ‘10 Honda Accord and hoping it will last until the supply chain is better. My car is newer, but hubby has ‘11 Camry that we are also keeping going as long as we can. I already have funds set aside for a new (used) car, but with prices inflating, I don’t know if I will need to save more or not? Maybe?
We are younger baby boomers, and some of the time you are talking about we were still in high school and college. I do remember prices being high when we were newly married and moved from the Midwest to the Washington, DC area. Our first house had a 12% interest rate in 1985. The only way we could survive out there was b/c we were frugal and had no other debt but our mortgage. It was hard when so many of our friends had things we couldn’t afford, but we didn’t want to go into credit card debt. We had 1 car for the first 10 years of our marriage. Things got better for us when we were able to move back to the Midwest in the mid 1990s. I hope the young people who read your blog will take your words to heart.
Thanks Chris! I hope so too. Thanks for sharing your journey too.
Sadly, I think you are 100% right.
A scene that summed up inflation was at the intro of every Mary Tyler Moore tv show, she was standing at a meat counter and she seems shocked at the prices and she tosses a small pack into her cart looking like “I can’t believe this price but I have to eat”
And the plague wasn’t a problem in the 70s either.
I fear it will be just end up even worse.
Thankfully we have no debt and no plans to get any debt.
It is sad, isn’t it? I believe you are right! It is going to be worse. I think a lot of people are going to lose everything.
I am thankful that we saw what debt did to people many years ago. No plans here to get into any just like you.
Precious, I’m sorry to say but many people today are living in La La Land. They think that if they just cut back a bit on groceries, all will be well. How laughable is that? I remember the inflation of the 70s and 80s. Back then we had people waiting on long gas lines. Today, we have people waiting on long lines to get covid testing or to pick up a weeks worth of groceries. It’s going to be worse this time around than the last. Used cars are selling for $29,000. The other day I read a post that a CA dealership was selling Ford Broncos for $110,000. And people were buying them!!!
I was giving out advice but I have since stopped. I guess I’ll just let people experience their own reality. I’m done!
We have a long hard slog in front of us. At least 3 more years of this. Biden has absolutely no idea what to do….being that he caused all of this simply by shutting down the XL Pipeline 30 minutes after he was inaugurated. God help us all.
They need to cut back on what they are spending on groceries. I will do a post on that soon. But they need to cut everything they can along with those so that they can pay off their debt. Yes it is going to be worse this time. Everything is inflated: food, the country’s money(they just keep printing devaluing the dollar), housing prices, car prices, etc. You can’t find Covid tests anywhere. Our county gave a couple of thousand out yesterday and they were gone quickly. Many people in line did not get them. I knew better than to go and try. It’s too darn cold out.
And if anyone doesn’t know what is happening with the food supply chain, go educate yourselves. Look at what is happening in other countries. Look at what the White House is doing to the truck drivers that bring food and billions of dollars of other products from Canada. ”
I can’t stop! Too many people here are in for the shock of their lives. If just one person listens, it will have been worth it.
Yes, he caused the majority of it. The man nor the White House doing the work for him know what they are doing. I would love to know where all the Covid money went that we gave him. He now wants more. UGH!
God is the only one who can help us right now.
God is most surely the only one who can help us. God is more powerful than the White House and anyone in it. I don’t think Jesus is coming back but only God now can help us all.
You are so right.
Totally agree! We have no CC debt and we rent from MIL so in an expensive area we are able to live below our means.
You are doing so well! I am so worried that people will be shocked when it happens. I remember all of this happening back then like it was yesterday. It was terrifying for so many people.