A word of encouragement: we can not really know what's going to happen. It is wise to think about it, analyze our spending/saving habits etc. but in the end we personally can not influence it that much. I am worried too, but trying not to overdo it.

My country went through a couple of awful years, when there was no economy, due to international embargo all the stores (including grocery) were absolutely empty, no gasoline could be bought, and the inflation was in such a hyper state that the salary the moment you received was worth three loaves of bread and the next day one. We had about ten or so zeros on our money bills. We survived somehow So whatever happens here, I am sure it's not going to be even nearly as bad.

Thanks Tanya. It's good to have some perspective.

Girls, I haven't had time to read the whole thread, but want to put my 2 cents in! As I have mentioned before, my husband worked in banking for years and is now a part-time consultant/full time farmer. He, of course, is very astute with money-me, not so much! One thing that really helped me was taking Dave Ramsey's Financial Peace course at our church. It was reallllly good and I learned a ton. If you have the chance, take it.

As for me and $ for clothes, I am going to be more picky. I am going to try to only buy things that make my heart beat faster. No more drive-by shopping!

Ana, I heard some wonderful advice by Suze Orman recently regarding your cash. Your cash is safe in a bank so long as it is FDIC insured. If you have more than 100K separate it into various banks.
Dave Ramsey also has great information. Just google his name and you'll find some great tips.
This is scary, but I also don't want to be paranoid. It is challenging me to make wiser purchasing choices, which is never a bad thing. It is encouraging my husband and I to think ahead and plan financially.
Bryan has always been money-wise, which is a good balance for me. We both have backgrounds in banking as well, which has helped.

I second Tanya, I've experienced fairly severe economic conditions, and it does help to keep things in perspective. Of course after getting used to comfortable lifestyle it's hard to downsize.
I also anticipate good deals on clothing this fall

So far the economy hasn't made a huge difference in our spending. We took a vacation in the US instead of going to Ireland as we'd planned and also plan to pay for our son to come visit us from Japan instead of going to see him. We will probably drive a car for a year or more longer before replacing it, partly hoping for better choices to come along.

I do have a concern about clothing as I try to build up a new wardrobe. We have lived in the same area for about 30 years now. My concern is that I'm watching women a bit older than I go from being stylish to dumpy in the years after retirement. I admit that some of my confidence and self esteem is tied to how I look. I don't feel I can ask, but I suspect that the economy and drastic drop in income is the reason they haven't updated their wardrobes. Their old work clothes are still in good shape and more-or-less still fit even if they have huge shoulder pads, tapered pant legs or less than flattering skirt lengths. If they have something new, it was a gift from a daughter.

I dread finding myself in this position. I'm wondering if there are investment pieces I should get now while I can afford them. If so, what are they? The discussion awhile ago about the stylish older women in Europe, especially France, is of great interest. I'd like to know more about how they do it and what I should be doing now to prepare for retirement that is just around the corner...maybe sooner if layoffs are made. Any ideas are appreciated!

My grandmother came from a highly wealthy family, that lost all its money in the depression. By the time I was born, she was solidly in the middle class. But you know what? I don't ever remember her not wearing makeup, perfume, high heels, diamonds and pearls, and a mink coat whenever she walked out the door, and carrying herself with an attitude that exuded wealth and status. Even into her late 90s (she died at 97).

Just throwing that out there, because this thread brought back strong memories of her (I can even smell her perfume). Maybe it sounds frivilous, but if we're going to go into another Great Depression, why not look fabulous?

Clothes - well made, quality ones - are tangible goods. Not intangible like the $ sitting in our investments.

Or I could be in complete denial.

Shiny, it sounds like your grandmother was a woman who knew how to live! I sense that you got some of your love of style from her?

My friend's mom was just as you describe. She was a jazz singer who had cavorted with the Brat Pack, dated Frank Sinatra, had the Beatles at her house, and lived quite a life. She had a costume jewelry collection that was auctioned off in its own show, and she looked just like Rita Hayworth. She died 8 years ago at the age of 84 when she slipped in her high heels and fell and hit her head on the marble lobby floor of her apartment building on Miami Beach.

I hope I go like that.

I just got time to read the posts here in the forum. As you know, I live in Charlotte and we have two big banks here (Bank of America and Wachovia). The city is deeply affected by the recent economic crisis. So are our jobs, house values and investments. I have lots of friends working at Wachovia who worried about their jobs all week long, it's getting better now but not over yet. What a week it was!

Ana, the law passed today increased the FDIC insurance limit to $250,000 for each depositor with an insured bank, so as long as you are banking with an FDIC insured bank, your money is safe.

I started to work this Wed. so technically speaking I'm not affected by the economic downturn yet. However, when I was staying at home, I read books like "Not Buying It: My Year Without Shopping", "Middle-Class Lifeboat: Careers and Life Choices for Navigating a Changing Economy", etc. They gave me new perspectives of spending and saving. I realized how mindless I was before when buying clothes and how much I have wasted. Now I'm more selective since I have a basic wardrobe already and I appreciate Angie's blogs and this forum even more because you help me to make good choices.

I think that with a slower economy, clothes would get cheaper and go on sale more often; the service would become better, which are all good news to us. I'm trying to look at things on the bright side.