[...] My Dollar Plan wonders about the effects of the recession on American’s personal finances: how long will they last? [...]

I could not agree with you more that the Great Deppression left a change in those folks. This Recession has not done that to folks yet but we are no where near done folks! How many of you can say that you do not know someone who is out of work or on unemployment benefits, how many can say that they do not know someone who has struggled with housing issues? Credit card debt is only part of the picture. If the average family earns somewhere around $60K take out taxes and tithing now let’s just say that puts them around $48K so their housing should be around $16K per year. Everything else should be managed on Another 16K per year leaving them $16K per year to sock away for emergency, family vactions, retirement, children’s college. Can you find housing for your family for $16K per year (that’s everything mortgage PITI , maintenance, electric water,furnishings. Oh so you rent still gotta cover , utilities, small maintenance and furnishings. Can you do it?
What about 16K for everything else food, clothes, health care, school supplies, transportation, cable bill, eating out, HOA fees, Driver’s license renewal, tags for the cars, toll road fees, on and on everything pets, vets, co pays for doctors everything can you do it for 16K? You can’t well it comes out of emergency, vacation, retirement forget about kids college funds,or get more income coming in!

[...] Effects On The Recession On America’s Personal Finances – My Dollar Plan [...]

[...] PDRTJS_settings_1129571_post_5124 = { "id" : "1129571", "unique_id" : "wp-post-5124", "title" : "Effects+of+the+Recession+on+American%E2%80%99s+Personal+Finances%3A+How+Long+Will+They+Last", "item_id" : "_post_5124", "permalink" : "http%3A%2F%2Fwww.thedailymiddle.com%2F2010%2F07%2F23%2Feffects-of-the-recession-on-american%25e2%2580%2599s-personal-finances-how-long-will-they-last.html" } From: Mydollarplan [...]

I was just listening to NPR yesterday and one of the politicians was talking about ways to make the banks start lending again.

Normally I side with the consumer, but we blamed the banks for lending too much money and now politicians are blaming them for not lending enough.

[...] Effects of the Recession on America’s Personal Finances: How Long Will They Last? History tells me that most positive effects of the recession (Americans’ increased savings rate, lower credit card balances, etc.) will be long forgotten in a matter of a few short years. (@My Dollar Plan) [...]

I agree 100% that mortgage debt should be included in the discussions, both on a micro (in the house) and macro (in the economy) level. I think the reason it’s not cited is that, up until recently, the mortgage was offset by a tangible asset, so it wasn’t really seen as the same kind of debt as a credit card debt, an auto debt, or student loan debt, where chances are there aren’t tangible assets that could be recovered to pay off the outstanding debt. Obviously, mortgages now fall into the same category in so many cases, but I guess it would be a huge shift in mindset and policy to start thinking of them the same way.

Thank you for your opinion. My father and I were just having a deep financial conversation a few weekends ago, and he was wondering the same thing: why is mortgage debt not seen as debt in the U.S.? In fact, he said that people with a mortgage were almost seen as more legitimate.

Great question.

I think I will have to agree with each of you, though I hate to be pessimistic:). I think the Great Depression really left changes in people because it was SO much worse and life-changing than this recession; not that I would want to wish the circumstances of the Great Depression on anyone.

It sounds as though we tightened the belt for a brief time, perhaps foregoing a European vacation for a domestic one. Or delaying that purchase of that must-have SUV for an extra year.

I’m disappointed to say it, but I think most people are merely waiting for the means to get back on that credit horse.

I just hope savings rates go up soon…being happy about 2.15% is depressing me…

For the most part, your situation won’t change who you are financially. You have to make the choice to live a financially responsible life consciously. Most people now are only living frugally to get by, until things get back to where they were before.

It’s the cycle that always repeats.