Are You Really Worse Off or Does It Just Seem That Way?

Like any good financial nerd, I spend a lot of time watching and reading the media’s coverage of the economy. Over the last few months the tone has gone from mildly concerned, through concerned, and on to full blown panic. This amuses me because you can literally watch the rhetoric ratchet up and up, sometimes from one extreme to the other in a single day. One station or paper reports things as “troublesome” then the next paper or station has to go one better and reports things as “worrisome.” Then the next one has to make it sound still scarier, so they go with “deeply concerning.” And on it goes until everyone is tossing out words like “panic,” “fear,” “depression,” “doom,” and “collapse.”

Of course this works its way into our psyches. We hear of things being “troublesome” and we begin to think, “Hey, maybe something’s wrong.” Then, by the time the media gets to “collapse” and “depression” our moods have followed suit. We become scared and panicky, thinking our personal finances must now be in free fall. We start canceling vacations, hoarding food, postponing needed household repairs and so on. All because we’re terrified that we’re heading for economic doom.

The question is: Are we concerned because we have a genuine need to be, or because the media tells us to be? I think, for a lot of people, it’s the latter. We watch the news and we hear about the troubles some people are having. We hear about “record inflation,” the “pain at the pump,” and the “mortgage meltdown,” and we think, “Boy, things are so bad. I’d better take drastic measures.” Then we panic. But are your personal finances in that much trouble? Are things really that much different for you than they were a year ago, or does it just seem that way because the media makes you feel that you should be suffering?

Here’s how to get a reality check. First, turn off the TV and stop reading the newspaper for a week. Just tune it all out. Give your brain a break from the relentless hype. This alone will give you much needed perspective. Without someone telling you how much pain you should be in, how everyone around you is suffering, how the world is collapsing, etc., you’ll probably feel better. Those things may be the case for some people, but if you look at your individual, personal life and circumstances, it probably isn’t the case for you.

Then take a look at your finances and compare it to the media coverage.

Mortgage meltdown got you worried?

Think about that. Do you need to sell your house right now? If the answer is no, then you’ve got nothing to worry about. By the time you’re ready to sell you’ll probably have no trouble because the market will have straightened out by then. Are you looking to buy? If you have good credit you shouldn’t have any trouble getting a mortgage and it’s a buyers market. Think about where you live. Is your area really losing that much value? Only a handful of places are seeing the severe losses that the media likes to cover. The rest of the country is either losing only slightly, stable, or even gaining modestly-all of which is normal.

The only people who need to really sweat the mortgage mess are those who over-invested in mortgages, those who need to sell in a hurry and can’t afford the loss, those who live in a grossly over-inflated area, those who are looking to buy but don’t have the best credit, and those who have adjustable rate loans that they now can’t afford. If this isn’t you, you really don’t have much to worry about.

Rising fuel prices freaking you out?

This one’s a little tougher, but you can still ratchet the worry level down. Do you drive a gas hogging vehicle? If the answer is no, then you can probably relax, at least compared to the guy with three Excursions in the driveway. Think about it this way: Assume you have a 20 gallon tank in your car. If gas is $3/gallon, it costs you $60 to fill up. If gas is $4/gallon, it costs you $80 to fill up. It’s only $20, yet many people run around acting as if it’s $200. I don’t deny that it hurts but really, $20 is a meal out, a NetFlix subscription, some magazine subscriptions, a book, or a couple of DVD’s. In other words, if it really hurts your budget, there are probably places you can trim or habits you can change (carpool, combining trips, etc.) to make up the difference. Do you have to drive a lot (have to, not want to or choose to)? If the answer is no, then rising fuel prices aren’t a big concern to you.

The people who are really hurting from the high fuel prices are those on the lower end of the economic spectrum and those with huge debt loads that are challenged by any little increase in the price of anything. People who drive huge vehicles are hurting, as are those who have to or choose to drive long distances to work or to chauffeur half the neighborhood around the city to various activities. If this isn’t you, you can probably relax a bit. It stinks, but it isn’t killing you.

Are grocery prices making you panic?

This is much the same as fuel prices. Unless you are living close to the edge, you can probably absorb the increase or at least change your shopping habits to cover the difference. Coupons, shopping the sales, shopping at less expensive stores, and buying store brands are just a few of the ways you can compensate for rising prices if you have to. Those who really have to worry about this are people who are already doing all they can to save on food and don’t have the cushion to absorb the extra. If you’ve got some breathing room in your budget and an ability to reduce your spending, then this is not a huge concern to you. It’s a pain in the rear, but it isn’t going to drive you into bankruptcy.

Are you worried about your retirement accounts or investments? Ask yourself this question: Do I need the money right now? If the answer is no, you’ve got time for the market to recover. You’re buying at a good time (stocks are cheap) and when the market rebounds, your accounts will rebound, too. The people who need to worry are those who plan to retire in the very near future or who need the money right now. If this isn’t you, or if you’ve already taken steps to move your money to more stable investments, just sit back, relax, and let nature take its course.

Worried about layoffs?

Take a good look at your company or business. Is it stable? Under good leadership? Making money? In an industry that’s not volatile? In an industry that’s necessary and difficult to outsource? If the answers are yes, you can probably take the worry down a notch. There are no guarantees, but certain industries are being hit much harder than others. If yours isn’t one of them, you can probably relax.

Thinking of canceling a vacation or putting off some home renovations or some other large purchase?

Ask yourself why. Are you doing it because you’ve taken a long hard look at your finances and discovered you can’t afford it, or because “everyone else is feeling pain, so I must be, too.” If it’s the former, good for you for choosing the responsible option. If it’s the latter, take a closer look at your situation. Do you have an emergency fund in place? Do you have reason to believe that you will have a job for the foreseeable future? Can you pay cash for the item in question without going into debt? Would doing/having it make you happy? If the answers are yes, then go ahead and take that trip or buy that item. If you can afford it there’s no need to suffer needlessly just because the media tells you that you should be feeling pain.

Whichever financial horror story has you worried, take it out and really examine how it relates to your life, not what the media says you should be experiencing. I recently told a friend that I “see” certain economic problems in our budget, but I don’t “feel” them. Every month when I input everything into Quicken, I can see certain categories becoming larger chunks of our spending. For example, auto, including fuel, used to be about tenth on the list. As of last month it’s crept up to fifth. But everything else is holding pretty steady, either because I’ve found ways to cut costs in those areas or because they aren’t real problems where I live. So I can “see” the problems, but I don’t “feel” them the way the media says I should because I can mitigate the damage or draw from other areas. Or it’s just not an issue in my part of the country. In fact, our net worth has actually grown by 20 percent since this time last year. We live well below our means, so there’s quite a bit of room before we feel pain. The media’s drama is not reflective of my life so I refuse to give in to it and panic for no reason.

I watch the media because I’m a financial nerd and I learn things that I can use for my writing. But I also take what they say with a grain of salt because I know they exaggerate and that not everything applies to me. I’ve learned how to evaluate my own circumstances and determine what I genuinely need to be concerned about and what is hype that isn’t affecting me. Everyone is different and you might have to worry about things that I do not, but take the time to determine what your level of worry needs to be before you let the media dictate it to you. And unless you enjoy the media, turn it off, tune it out, and see if you don’t feel better. You’ll probably realize that things in your own personal world aren’t as bad as the media would have you believe and you can go about your daily life without the added drama.

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18 Responses to Are You Really Worse Off or Does It Just Seem That Way?

  1. Courtney says:

    OK, you’re right. It’s ONLY $20 more for gasoline. And I do have an efficient car. So does my husband. And we don’t have to drive very often, so we only fill up once every week.

    But $20 for two cars, filled once every week, costs us an additional $2080 every year.

    That is enough for a semester of community college for my husband.When we’re struggling to pay the bills every semester, we don’t really need to add that to our credit card bill.

    “Only” $20? Pshaw.

  2. ActYourWage says:

    @Courtney: Cut back on your entertainment. This past weekend Batman had an all-time box office high in sales. People must be getting by some how.

    BTW, My wife and I spend about $475 in gas/month. That is $5700 a year. I bet alot of people make more than we do too.

  3. ActYourWage says:

    I agree with this article. If the media would shut up; people wouldn’t react the way they do.


  4. Brenda says:

    I think that you underestimate the fact that many people do live so close to the edge. Unfortunately, this may not necessarily be the result of poor money management, but largely due to the decreasing salaries (IBM did a huge paycut and other companies are following suit), increasing prices. I think you make light of a volatile economic situation.

  5. Rose says:

    Thank you for this – it’s a great little reality check. :)

  6. Jay Gatsby says:


    The media needs something about which to write. Unfortunately, bad news sells rather well. We would all be better for it if we just tuned out once in a while. Another idea is to watch international news. You’ll be amazed how much of a difference there is between U.S. news and international news.

  7. disneysteve says:

    Jennifer, I think you are right. And Brenda, I think you are right, too.

    I do think people take their cues from the media and “feel” richer or poorer based on the news, whether it is true or not.

    But Brenda’s point is a good one. Lots of folks live paycheck to paycheck. Sometimes it is due to too many wants but sometimes it is simply due to a low income. So an extra $20/week might be easy to compensate for if you have a lot of fat in your budget, but if you are already living lean, that extra $20 isn’t so easy to adjust for.

    Personally, we’re doing fine. We continue to meet all our savings goals. In fact, I just increased from 18% to 19% of income going to savings as of July 1. Of course, I see the numbers dropping in our investment portfolio so that does make me “feel” poorer. I know they are only paper losses, but they are losses all the same.

  8. SaveForHouse says:

    I agree with this article that the media in general is worthless. The media is all about generating buzz to sell advertising, but of course there are always a few positive exceptions.

    At the same time, must disagree with this article. No, things are not that much different for me vs. 1 year ago. However, that does not mean that I should ignore the macroeconomic facts that have been slowly compounding for the last 10-15 years. It’s hard to see change when you look at 1 year, but it’s easy when you look at the longer term.

    Each year that passes (starting in the 90s when Greenspan started driving the dollar into the ground with low interest rates), the US is in worse shape in terms of inflation, national debt, debt of the average US citizen, and financial shape of the average US citizen. I think it’s time for people to wake up and realize that major changes need to be made on our overall fiscal policy in addition to the average person’s personal financial situation. While the media is clueless, I’m glad that they are at least creating some buzz because people need to start thinking about these topics seriously and taking action.

  9. Dody says:

    This is utter tripe! When the divide between rich and poor is the widest since the Depression, and at least 30% of the US close t the edge, you act superior and tell them to quit whining. Go to hell you bloody blue blood wanker.

  10. I really don’t think the blockbuster movie tally has anything to do with how people are pinched financially.

    If you’re living paycheck to paycheck, do you go to 10 movies throughout the year … or do you pick the one or two you really want to see and make an effort to go?

  11. ActYourWage says:

    @Monroe on a budget

    Most people don’t live on a budget, they eat out all the time and go to the movies or some form of entertainment. Those people that watch Batman have probably been to a few others this year. You may save up and only go to one you really want to see, but lets face the majority don’t take this approach. The media IS a major factor in our thinking.

  12. TopWaysToSave says:

    The economy is definitely rough, but I think the media does fan the flames. The worse they portray everything the more people panic.

    It seems like everything is off right now. Job loss is high. Real Estate is rough. Gas and food prices are going higher and higher and it seems every utility rate is rising. Sadly peoples pay checks aren’t raising enough to cover all these extra increases.

    People have to find more creative ways to cut back and save and it’s getting harder and harder for some.

    Its darkest before the dawn so hopefully we’ve seen it as dark as it’s going to get.

  13. vashana says:

    I am glad you wrote this article. I feel better about wondering what the big deal is on the increase of gas and food. Yes, everything is more expensive, that happens. We just factor it in to our budget. No, we don’t have very high income(I am a stay at home mom).

    We just live way below our means and budget. We have been taking advantage of the market by buying real estate(in cash).

  14. Gail says:

    Very good article. Each person needs to take a look at their own finances and see if they need to cut out some fat or find ways to save. The media is horrible about gloom and doom and it scares people needlessly. As the writer said if you already have a house and no plans to sell it, the current housing market really isn’t ( or shouldn’t be) a big concern to you.

    I ran errands today and in the process I saw a newspaper screaming headlines about the cost of natural gas going up. Immediately I was hit with a sense of dread. At the same time I know we are doing what we can to lower our heating costs and I have some more things to do before winter–making insulated curtains, etc. I also found that I needed to remember who is really in control of my life and HE can be trusted to care for us.

  15. Carol says:

    Jennifer, I don’t mean to flame or any offense, but you sound like someone on the Titanic who says, “There’s no water in my cabin yet, so how can the ship be sinking?”. When you say that unless someone is “living on the edge” or only feeling the effects of the economy in certain areas where things are tough, you are talking about millions of Americans. And not just people in the inner cities or poor rural America, but white picket-fence, 2.5 car garage suburbia, too. How will the market be able to absorb the loss of all this purchasing power without the rest of us feeling the effects through higher prices? Not to mention the falling value of the dollar which further reduces our purchasing power.

    And by the way, regarding the people going to see Batman, remember the “Golden age of Hollywood” was during the Great Depression. Millions of people went to the movies to get their minds off of 25% unemployment.

  16. As Paul Simon once said, “I don’t believe what I read in the papers – they’re just out to capture my dime.”

    Personally, I find the fact that he references a dime for a paper somewhat telling. After all, that is a lot of what we’re dealing with now with increased food and energy prices – inflation. Inflation comes, and inflation goes. So do housing, credit, and tech bubbles. Despite the trying times we find ourselves in, I don’t think it’s great depression time. Technically, the U.S. has not even entered a recession yet, but 75+% of the population thinks we have just because they hear it, see it and read it day in and day out on T. V., radio and the papers.

    What’s really at play here is greed and marketing. The media knows that nothing sells like fear, and with a 24/7 news cycle and increased competition, everyone is out to capture your dime. “News at 11 – don’t miss our special report!”

    Each of us should stop and consider: Are you really as bad off as you feel after seeing the nightly news?

    Yes, I know we pay more for gasoline and corn products than we did a year ago, but has your quality of life really suffered all that much? Are you living on cat food? I’m going to guess that most of us are not. The latest iPhone sold out in record time despite a high price tag. The new batman movie broke box office records. People are still taking vacations and spending money on things one can hardly call necessities.

    As for me:

    “I ain’t worrying
    And I ain’t scurrying;
    I’m having a good time”

  17. mark says:

    Great article. And I agree. I too was following the recent news development on the economy and I became depressed and panicky — until I simply turned it off for a few days, re-checked my finances and figured out I have never been better off.

    It’s funny how people beilive that what they see on TV is more real than the reality itself.

  18. Cindy M says:

    I routinely have come ignore most of what the media has to say about anything for my own peace of mind; it’s the same old drivel day after day. There’s really “no new thing under the sun,” Ecc. 1:9 in the bigger scope of things. And you sure don’t have to spend a dime on Batman or anything else coming out of hollywood when you can easily google and watch it for free on your own PC.

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