Yesterday's stock market tumble basically wiped out any gains most people's investments had made so far this year. Ok, so you don't "play" the Stock Market but if you have any kind of investments(outside of a CD tho there are Market linked CDs)you are affected.
The national news outlets reported that the average 401(k) lost almost $12K worth of value.
Considering statistics noting that in 2011 the average 401(k) balance is $75K, that is quite a loss of value.
I can commiserate since my Vanguard account (which holds a portion of the money for my kid's college funds)fell to pre 2011 levels. So much for using some of this account to pay tuition bills for 2 kids this month!
You know....I was going to transfer $ out of that account in May, since historically stocks go down during the Summer months. I knew I needed to write tuition checks this Summer for the Fall term.
But then I was distracted dealing with other things. When I got around to transferring the money, it had lost a goodly portion of it's 2011 gains. So I checked each week and waited.....and each week it went down more and more. And then the last 2 weeks it plummeted like Stonehenge baby!
Too late to pull it out now unless I want to take a loss....and that's not something I want to take!
I'll have to let that money ride and hope it recovers by Jan. 2012(or August 2012)when I need to write tuition checks again. 8-(
On the other hand, if you aren't risk adverse, now would be a great time to let your investments ride or to jump into the Market.... ;-)
You may recall that the President gave us a tax break in 2011.
That was nice of him, wasn't it?
All working people got a yearlong Payroll Tax Cut, remember that? That's the little bit of extra pay you've seen in your paycheck this year.
I bet you got use to relying on that little bit of cash each pay period to pay your regular monthly bills.
And now you rely on it being there, don't you?
Let me be the stick in the mud and remind you that this tax cut is temporary and will end at the end of 2011-less than 5 months from now.
Here's a tip.....
You might want to start throwing that extra cash into savings and start living without it now so that when it vanishes at the end of December you can still meet your bills without needing it.
You'll need it next year to pay your food bills since word is out that price inflation will be ramping up even more at a grocery store near you.
Hours after the market closed, the government released the monthly jobs report which showed that Unemployment went down.....from 9.2% to....are you ready for this?......9.1%.
This was due to the creation of 117,000 new jobs in July, which was about 30,000 more than the White House was expecting. Someone said those jobs were probably all Grief Counselor positions for all the Stock Market Traders who will need therapy after yesterday's close. lol
Even so, with the growing population, we need 300,000 new jobs a month to make any real progress in unemployment. 117,000 jobs means we are barely treading employment water.
Last night on the national news, after one of the segments on the national economy, an ABC News reporter made the comment that people are afraid we are headed into another recession.
Ummm, excuse me?
Did we come out of the current recession while I was blinking or in the bathroom or something?
I don't recall the recession that began in 2008 ending!
I don't see it locally or nationally. And if you ask most anyone on the street, they don't recall that recession ending either.
No matter the numbers the taking political heads throw out there, trust me, for Mr. and Mrs. John Q Public, the Recession never left!
I see it at the grocery store, hear it from people in line at the post office, read it on personal finance blogs and in the local newspaper editorial section.
It's still that good-for-nothing relative living in your basement for the last 4 years, using your electricity, driving your car(and not putting gas in the tank), raiding your refrigerator, texting on your cell plan and borrowing your credit cards.
Or for me it's like my 15 year old Teenager....he costs me excessive amounts of money, he expects too much, I can't reason with him and I can't throw him out of my house.
This Recession is entrenched and like your good-for-nothing relative, it ain't going away anytime soon.