Poor Ruth Madoff.

Bernie Madoff’s wife is now crying broke because she has been stripped of all but $2.5 million in assets. In New York her duplex apartment was worth $7 million.

The fascination with money and its excesses are intriguing. Last week, I read an article about the lack of skilled trade workerswho are needed and the positions pay $22 an hour which would be over $45k a year. Additionally there were other engineering positions that employers were having difficulty filling which paid $50k+ a year. In the East, people were crying that you can’t afford anything on that wage. While in other parts of the country $45-50k annually might not get you into a fancy country club but you wouldn’t be broke either.

How far money will go depends on your location in the country. Real estate prices in larger coastal cities may be higher than in the middle of the country, though decent homes in good neighborhoods can still be had for people making $50k a year.

Mrs. Madoff who was allegedly not a part of her husband’s business dealings still gets to keep five times more than the maximum payment that claimants may receive toward their investment losses.

In most parts of the world, $2.5 million dollars does not make you poor. In a relative sense when you had more and lost the majority of your holdings, then a paltry $2.5 might seem like a poverty level when compared to $65 million or more. Yet, for people who lost their live savings to leave with $2.5 seems like a dream.

Ruth Madoff’s salon and florist (among others) no longer want her business, so she may not have to worry about her $2.5 going very fast. Some buildings don’t even want her to live there, so her millions may go a lot farther than originally thought. If people can survive on $50k a year, R.M. should be able to do it as well.

Today the president is talking about credit cards. Most people have them, but not everyone has an exorbitant amount of debt on them. The proposed changes to the Credit cardholders’ bill of rights provides provisions for people who have unreasonable interest rates, proposed that lenders provide notice of interest rate increases at least 45 days in advance so that consumers have a rate to shop around for a lower rate and ends penalties for people who pay on time. Other unfair practices are also addressed.

The credit card industry is in the business of making a profit. Unfortunately, it was at the expense of many people who didn’t pay on time or paid only the minimum and got themselves further into debt. Some of the interest rates, even for those with ok credit were usurious.

What I would like to see in addition to this Bill of rights is some sort of education for the consumer, especially on college campuses, where students are highly likely to get in financial trouble with their first credit cards. Even adults who do not budget may get into financial trouble. When you think that you can just charge something and do not make the connection that you have to pay for the purchases it makes it difficult.

Credit card education will come too late for many. Good credit is not about luck it takes work. In rare cases of identity theft or financial problems bad choices will ruin your credit. Not everyone knows how to use credit cards to their advantage. The ease of access to credit made it possible for more people to get a card and to have some challenges with their repayment.

HR627, as the bill is formally called, would be a boon for debtors. Though some education needs to go along with the bill so that future generations will not have the same problems with easy credit.

People are spending a lot more time at home.

What they are cooking I don’t know? Grocery stores aren’t even that crowded anymore, even the ones that are not near public transportation. The gardening bandwagon has just started and it hasn’t been warm enough to plant anything in Northern Illinois, let alone harvest anything yet.

What has been happening?

Near college campuses, restaurants and coffee shops still seem to be doing a brisk business.

Some stores have been reducing the amount of items that they offer, which makes it seem as they are either going out of business or going for a high end empty shelf boutique look. There are fewer items on shelves and fewer choices.

I had gotten used to having a lot choices in stores when I went shopping. Now there aren’t as many things being carried because stores don’t want be stuck with the merchandise. Especially if it is perishable merchandise.

This Gallup Poll shows that consumer sentiment has improved but people are still holding on to their cash. Things are so uncertain many are just waiting to buy what is necessary. The data also showed that people were still spending, just spending less when they did go out or buy necessities.

Newsweek has a cover story that is titled “Stop Saving Now.” This is giving advice about spending some of the money that people have been saving to boost the economy by taking a risk through investing, starting a business or doing something that could put some zip back into the economy.

This may sound good in theory, but our country has never considered saving to be an important part of its financial lexicon in the past few decades, especially not in the last couple generations. Even speculators and venture capitalists are not investing the way they used to – they may not have the money either.

The last few market sessions the Dow has gone up instead of down which is a good thing. The paradox of thrift is making everyone save more than they possibly should but fear is a great motivator. Buying nothing and saving everything could make people swing the other way and start spending recklessly again when they feel more secure.

Furloughed?

Unpaid time off.

Whatever you call it some companies and government branches are requiring furlough days so that they can balance their budget. Interesting. Not all of the workers can afford to work one day or more less per pay period and still be able to pay their bills.

In an ideal world, said Juliet Schor, an economist at Boston College and the author of books on labor, leisure and consumerism, shorter working hours would be voluntary, and workers would be compensated for any increased productivity. But even forced furloughs could provide more time for family, community, learning and volunteering, unless people must scramble to fill the time with a second job. Smaller paychecks, she said, would “dampen down the competitive consumption that’s associated with the high-hours economy,” leading to a sustainable way of life. 

Though economists lament that when people earn less they have less to spend, that is an issue for a society whose economy is based on consumption. Those who are required to take a furlough day are having their wages decreased – something they might not have known about when they rented an apartment, took out a mortgage or decided to have their bathroom remodeled. So, instead of being able to pay their bills their own personal budgets may suffer. Even if they are making ends meet, will an unpaid day off make it impossible for people to live? For those not spending really close to the vest, and extra day off might work well for some.

If you have to take a furlough day and children, see if you can work out an arrangement with your child’s school to be a volunteer or chaperone for those trips. Weekly volunteers are always needed at many places, so while you are working a full time job, you might be able to volunteer twice a month.

Dreading furlough days, because you need the money? Try reassessing your budget and see if you can make it without a day’s pay. Really can’t? Check and see if you can find a part time job or do some contract work.

Required unpaid days have benefits for some people. This could be one less day to pay for preschool, before or after school care and one less day to drive and pay for parking. Some studies have shown that people are more productive when they have less time to do their work. For some smaller government agencies this may work well or eve some companies where workers try to spread out their work over the course of a week to “look busy.” Not all offices have peak work periods and offices that do not deal directly with the public or customers can have furlough days without inconveniencing the public as much.