Getting Through the Lean Years

 And the seven years of famine began to come, as Joseph had said. The famine was in all lands, but in all the land of Egypt there was bread. –Genesis 41:54

While I was working toward my BBA I took a lot of economic classes. None of what I learned helped me in my job as a government purchasing agent. It didn’t help in my job as an accountant. I swore that somehow, some way, in my lifetime, I’d find a way to use that knowledge. The time has come.

 

The Value of Money

What is money worth? Whatever the government says it’s worth. Years ago we lived under a gold standard, meaning the government couldn’t print money unless it was backed up with gold. Did that make a difference? It kept the government from printing money recklessly. Now, that’s determined by the Federal Reserve. Since this is a capitalistic economy, economic pressures motivate the Fed. The stock market, the labor market, consumers, business, all contribute to these pressures. If one thing goes out of whack, the whole economy suffers. But though the government puts a monetary value on money, that’s not really what it’s worth.

Your money, whether paper, coinage or gold, is only worth the goods and services you can exchange for it. Enter inflation.photo 2

The Cost of Living

The economic downturn began almost six years ago. Since then we’ve been in a recovery. Did you know that? Wall Street investors know it. They’ve done great. Laborers haven’t fared so well. Even those who’ve remained employed have seen their income shrink. The middle class has shrunk. Some have moved into the top ten percent, but many more have fallen into the lower economic class.

Did you know inflation is pushing people into the lower class? No one talks about it. Luxury and high priced items have remained stable, but prices for food and other necessities of life have crept up at a steady pace. This doesn’t affect upper income people and the government weighs certain items. Food isn’t considered as important as a car (how convenient) and some necessities are taken out of the inflation equation, so on paper, the numbers don’t look bad. But in the marketplace, it is bad. The cost of living is a lot higher for poor and middle income people.photo 2 (1)

The Economic Cycle

In capitalistic countries the economy goes in cycles—prosperous, lean, recessions, booms, depressions. Regardless of which cycle we’re in, we have a chance to move from one economic class to another. America still has opportunities.

If we only had Joseph’s insight during ancient Egypt, we’d save during the prosperous years so we’d have enough during the lean. But though we don’t know how long the cycle will be, if we maintain an emergency fund, we can weather the lean years. Just remember you’ll need more than you think. Money saved today won’t be worth as much in future years, especially with interest rates on liquid accounts being almost non-existent.

Save Things When Possible

I save durable high inflation items like paper products and detergents, even food items like rice, beans, coffee, sugar, and canned food. If there’s a sale I stock up. I’ve saved a lot on coffee alone, and let’s just say I have enough toilet tissue to take me through the tribulation. Laugh if you must, but these are inflation-proof items.

Your emergency fund must cover more than emergencies. It must see you through the lean years of the economic cycle.

But be of good cheer. It’s sometimes during the lean times that we’re motivated to progress. America’s greatest resource is the innovative spirit of its people. Somewhere out there people are working to provide the stuff we need at a lower cost.

Oh, and there’s something else that goes in cycles—politics. When the people get fed up with the economic policies of one group, they’ll switch to another.

I’m glad I was finally able to get this economic stuff off my chest. I feel better now.

Next week we’ll do a budget checkup.

 

I'm a retired Air Force (civilian) accountant living with my husband, Robert, and bichon-poodle mix, Buffy, in Warner Robins, Georgia. My interests are varied. I enjoy reading and writing Christian historical romances and inspirational commentary, golf, sewing, crocheting, knitting, politics, history, science and mathematics. I attend church regularly, and God is the center of my life. I'm proud of the good job my daughter is doing rearing my three wonderful grandchildren. God and my family make up the inner circle of my life, but I want to reach out with understanding and love to others.

Tagged with: , , , ,
Posted in Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: