Reducing our personal spending

bauderline

I'm not sure if this is the right place to have this discussion, but I'll keep it as short as possible..

I suppose what I'm saying is that we are all looking what's going on and fiercely resisting any cuts or changes. I accept your point that we have been put in this position by the Gov and the banks, but we also need to accept we pay ourselves too much money, that our minimum wage needs to drop and that SW is too high, and we hand out too many benefits. It is no longer a viable situation. Taking that into account....and the fact that we no longer have any money in the country....it stands to reason that we do have to accept some cuts. And that's what I mean by moderation. It's okay to earn a decent wage, have a decent house, whatever, but it's not really okay to accept (and demand) as the norm, 4 or 5 holidays a year, dabble in "property investment" and drive the latest model of car of your choice. I know everybody didn't do this, I know some people were very prudent, which is fine. But a lot of Irish people went nuts with credit cards and created an image that they now cannot afford to maintain (and realistically never could).And we were very good at awarding ourselves payrises and bonuses just because or for time served. Which is not a viable way to do business in the long term.And we are fiercely resisting any change to the current status quo, which is not really realistic.

That's what I mean by moderation.Have holidays, have a car, whatever. But we have to accept the last 10 years (and particularly the last 5 years) were a colossal bubble. And to be aiming to get back to those levels of expenditure and income, with low tax is completely unrealistic. We need to accept that slightly lower levels are actually okay, that we live life and run our economy on a more even keel. We can't demand that our banks are fixed and our problems solved, but flatly refuse to accept any changes in our own lifestyle.

Sorry, that could have been shorter....I won't go further as this is not the point of this sticky.

There is a fairly strong argument for this in the public sector and cuts are needed there without a doubt in all areas.

However with respect to the private sector it really isn't anyones concern what people are paid. If you are paid enough to go on holidays five times a year and buy a new car every year then what's the problem with that... why should I lower my expectations when I can afford it ?

To be clear I am also comfortable with tax rises as long as the appropriate steps are taken to deal with the public sector issues...

I am no economist but I guess if you include the new IMF loan we are looking at upwards of 230 bn debt for this country, with an annual income of some 26 bn (I think ?) there is no hope for us to pay of this debt, the net results is that we will be milked for interest for decages to come !?

krankykitty

So the TL,DR version of this post is:

public sector worker - don't flash the cash, private sector worker (even if on same pay as public worker) - spend your disposable income on whatever you want?I must have missed the memo where the public sector workers were "demanding" five holidays a year :rolleyes:

Lets face it - we're all going to be hit with cuts, higher taxes etc. Whatever remainder of disposable income you have, its no-one else's business how it's spent, no matter what sector you work in. I don't see how not spending your money (once you're not in debt and are up to date in bills etc) is going to help matters, in fact it might make it worse.

Dirk Gently

bauderline wrote: »

However with respect to the private sector it really isn't anyones concern what people are paid.

It's not really anyones concern how much a private company loses either.

oh wait.

bauderline

clown bag wrote: »

It's not really anyones concern how much a private company loses either.

oh wait.

You are dead right... It isn't our concern and we sure as hell shouldn't be fitting the bill for it.... time to correct that particular mistake !

dan_d

I should point out that my post (part of first post on this thread) was posted in the context of the sticky at the top of the forum, as part of posts there that were explaining what happened and what's happening next for ordinary people. Just so everyone understands the background there. However it wasn't the place to continue the discussion, so Bauderline started a new thread for it.

Will reply to other posts later, haven't got time right now....

Ray Burkes Pension

Surely if we reduce spending (and keep our money under mattresses etc), this will have a huge effect on consumer confidence. Are we to rely solely on our export market?

t0mm13b

Well I'd like to point out this and got laughed at by the logic

to re-iterate:

If you have 20 euro and spend something valued at 18 euro, equals happiness

If you have 18 euro and spend something valued at 20 euro, that equals misery

"Don't spend more than what you cannot afford"... which is what is about reducing personal spending....

dan_d

The context to this post was "what will this IMF loan mean to the ordinary person".

I pointed out that I hoped it would mean various things, but not have too many huge impacts in terms of day-to-day life...the biggest impact, country-wide, would be that we learn the meaning of the phrase "everything in moderation". In doing so, I pointed out a number of things that I hoped we would stop demanding as "normal" ie 4-5 holidays a year, brand new cars every year of your choice, etc (while emphasising that I know not everybody did this), and following on from this, the min wage and possibly the average wage might drop. Bauderline pointed out that if someone in the private sector earns enough money to afford all these things, there's no reason why they shouldn't have them - why should they apologise for their wage.And also, why should we pay for a situation we didn't create.

So what I'm saying (and I hope I can keep my train of thought here) is that I hope Irish people learn to live life (and run an economy) on a more even keel. To accept that credit and a flashy lifestyle are not the be all and end all.You will always have a certain portion of people earning well above average wage....normalisation curves explain this.No problems there.But I hope we learn that it's more important to prepare for bad times while enjoying ourselves to a more moderate extent, rather than to splurge on lifestyles we can't afford. We may not have created the situation we are now in, but we could not have continued living the way we were.The whole situation was completely and totally overcooked and it was only a matter of time before it boiled over. Sooner or later we were going to have to increase taxes, and lower wages/SW etc. But unfortunately we made a complete b&*$ls of the method in which we've gone about doing it, and reduced ourselves to the worst possible situation really.

Having said that, we will get through this and, as I said before, I hope we learn a lesson from it.....because otherwise we'll just be right back here again in 20 years time....

amacca

t0mm13b wrote: »

Well I'd like to point out this and got laughed at by the logic
"Don't spend more than what you cannot afford"... which is what is about reducing personal spending....

And after reading this for the second time I'd like to point out that you don't seem to understand what you are writing or alternatively you dont have much of a handle on the english language.

"dont spend more than what you cannot afford"

It gave me a headache to read this one ...presumably your advice is that a person should not spend more than they can afford?

if so...I broadly agree....most people would.....the problem as far as I can tell is people were not fully aware of what the could afford or were not equpped to assess what level of debt they could take on safely (institutions wilfully broke any sensible norms)

you can blame lots of factors for this (including the individuals own lack of responsibility/maturity imo) but your advice at this point imo is closing the barn door after the horse has bolted or useless

or alternately you are saying there sould be no credit at all?

btw who is "the logic" and why did he/she laugh at you


normally not pedantic or nitpicky but wondering what you mean

bauderline

dan_d wrote: »

The context to this post was "what will this IMF loan mean to the ordinary person".

I pointed out that I hoped it would mean various things, but not have too many huge impacts in terms of day-to-day life...the biggest impact, country-wide, would be that we learn the meaning of the phrase "everything in moderation". In doing so, I pointed out a number of things that I hoped we would stop demanding as "normal" ie 4-5 holidays a year, brand new cars every year of your choice, etc (while emphasising that I know not everybody did this), and following on from this, the min wage and possibly the average wage might drop. Bauderline pointed out that if someone in the private sector earns enough money to afford all these things, there's no reason why they shouldn't have them - why should they apologise for their wage.And also, why should we pay for a situation we didn't create.

So what I'm saying (and I hope I can keep my train of thought here) is that I hope Irish people learn to live life (and run an economy) on a more even keel. To accept that credit and a flashy lifestyle are not the be all and end all.You will always have a certain portion of people earning well above average wage....normalisation curves explain this.No problems there.But I hope we learn that it's more important to prepare for bad times while enjoying ourselves to a more moderate extent, rather than to splurge on lifestyles we can't afford. We may not have created the situation we are now in, but we could not have continued living the way we were.The whole situation was completely and totally overcooked and it was only a matter of time before it boiled over. Sooner or later we were going to have to increase taxes, and lower wages/SW etc. But unfortunately we made a complete b&*$ls of the method in which we've gone about doing it, and reduced ourselves to the worst possible situation really.

Having said that, we will get through this and, as I said before, I hope we learn a lesson from it.....because otherwise we'll just be right back here again in 20 years time....

I think what you are getting at here is the fact that many people in Ireland went mad which cheap credit over the last ten years and that is not sustainable as the bills eventually have to be paid. That is an entirely valid point and a good one, however I get the impression whilst said people went mad with this credit in previous years they hit the brakes during 2008 and have been busy rapidly reducing personal debt over the last couple of years, they appear for the most part to have reacted in a fairly sensible fashion...

You also mention lower wages, I assume you imply public sector wages will need to be lower to reduce the pressure on the national budget, private sector wages are purely a matter for individual private companies and the people that are employed by them. It is up to the company and individual to negotiate terms which are agreeable.

I expect to pay increased taxes and given the current context that is fine, however I would like to see stamp duty replaced with a sensible property tax and VRT should be scrapped so that we can get some decent competition into the Irish Motor market.

I think the thing that is annoying me about a lot of these threads is the amount of prolific finger wagging that is going on at the average Joe for going overboard for the better part of the last ten years, however they are now having to balance the books and they ain't complaining too much, moreover it isn't the average Joe's exuberance that has brought the country to this current point. My understanding is that it is the massive commercial debt caused by wreckless lending practices during the construction boom that has crippled our banks and hence the wider Irish economy.

The majority of people in this country are able to pay their debts, the banks can't and Joe Public is being asked to pick up the bill... from my point of viewing the finger wagging or other finger gestures would be best directed at the banks, our politicians and the cretins in the EU.

Anyone who think the Irish people have some sort of duty to pick up our bank debt belongs in a mental asylum... if you can find one....

baud.

Mr Benevolent

Strauss-Kahn has told us to 'tighten our bets' too. He's right.

digme

Confab wrote: »

Strauss-Kahn has told us to 'tighten our bets' too. He's right.

ah, no, he's not.

Dishonest, thieving, corrupt, incompetent bankers were loaned this money by German, French and British banks.

The bankers took their profits and their bonuses and when their gamble turned sour they dumped the bill on the taxpayer, aided and abetted by a government that was at best totally incompetent, at worst totally corrupt and complicit.

so strauss kahn can gfhs

Mr Benevolent

digme wrote: »

ah, no, he's not.

Dishonest, thieving, corrupt, incompetent bankers were loaned this money by German, French and British banks.

The bankers took their profits and their bonuses and when their gamble turned sour they dumped the bill on the taxpayer, aided and abetted by a government that was at best totally incompetent, at worst totally corrupt and complicit.

so strauss kahn can gfhs

It's too late for that recrimination stuff now. We have to deal with what's in front of us. I'll certainly be tightening my belt, which even on the dole was fairly loose to start with.

digme

mmmmmm serfdom.