Far too many Americans cannot, and with total chaos at the leadership level of the country, it’s more and more likely we are moving into a crisis many won’t be able to survive.

         AS I TYPE this up our leader has decided to pause tariffs on all nations but China for 90 days and the stock market rallied. OK.

            I don’t normally do politics on this blog, and don’t really intend to today, but I’m going to write about our economic chaos because this rain from this storm is going to fall on all heads – left, right and center; young and old; black and white; gay and straight.

            I don’t know that the 90-day pause is going to fix this, if after 90 days we jump right back into the chaos of the past few days. Our leader has said 70-some nations have contacted him and want to negotiate tariff rates. That is going to amount to 70 individual trade deals and how those can be negotiated in 90 days is a mystery my old brain cannot solve. And the ongoing management of 70 different trade deals has never been attempted.

            My plan for this blog was to write about what folks can do to survive a tanking economy that could take years, decades to recover. To cut to the bottom line, a lot of people will not survive it. Here’s why.

1. A poll conducted by Talker Research found that 59 percent of Americans map out which bills to pay first while waiting for payday, with 51% of their money already earmarked before it hits their account. Past-due bills are another big reason people count their chickens before they hatch, making up 38 percent of pre-spent funds. Only 40 percent of those surveyed keep up with all their bills. Americans spend about 43 percent of their paycheck within just three days of getting it.
2. As of 2024, nearly 39 million Americans live below the poverty line, meaning the is no wiggle room for them if prices on essentials rise dramatically, as they will if tariffs are reimposed and the one on China goes on from today out.
3. In 2022, about 46 percent of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9 percent had more than $500,000, not adequate for a long-lived retirement.
4. According to the National Institute on Retirement Security, only a small percentage of older Americans, seven percent, receive income from Social Security, a defined benefit pension, and a defined contribution account. Retirement income from these three sources is widely considered to be the ideal situation to ensure retirement security, particularly for the middle class. Those who live month to month on Social Security alone will be in dire straits when they retire.

I AM POSTING all this just to show that far too many Americans are not in a healthy position to weather a storm, particularly one as large as the one we see looming now. Some simply cannot help it. Because of education and circumstances, they cannot climb out of poverty. For some elderly, they worked jobs without pensions at wages that precluded their building retirement accounts. One pundit said the stock market declines of that past few days were not big deal because “only half of all Americans are in the market.” Well, therein lies the problem given that 401Ks, other IRAs are a part of the market.

I was going to make this blog post about how you cope with all this, but then I realized most people can’t. Finance writers have been urging people to take cash positions, but if you look at what I posted above, most people can’t.

I can. But I began working toward a cash position more than a year ago, primarily by taking all our cash out of CDs and putting them in an EverBank savings account paying 4.9 percent at the time. It’s now down to 4.3 but CDs from that bank pay 4.1 so it’s still a good deal. Why? Because it’s a savings account and there are no withdrawal penalties. Four years ago we moved from Texas to PA and sold our house, which was paid for. All that cash remained cash. When my mother died several years ago, her estate went into CDs – cash. It took time.

We are retired and rely on Social Security for our cash flow. My wife is in memory care and when she went in, our monthly housing costs doubled. We have long-term care insurance but still pay 25 percent. Of course I am worried about Social Security. Will checks be delayed, benefits cut? With our current leadership, we just don’t know. So, I have put us in a position, cash-wise, to survive that along with rising prices for a fair amount of time.

Let’s see where I stand compared with multi-millionaires and up. 

Those folks will weather this, although those whose millions are all stocks, and particularly stocks purchased seeking high returns, could be in trouble. Me, compared with them and compared with folks I would consider my peers? I am a fluke when it comes to available cash. I bet quite a few of my peers, in terms of cash, can’t go the six months that is recommended as a cushion, or maybe even 90 days. That is a problem, a big problem.

Too many Americans are living paycheck to paycheck, as noted above, with no margin for error. That’s either because the paychecks are not that large or they just bought too much car, too much house, too much stuff. We never have, mainly because over our lifetimes we have seen a lot of ups and downs so we’ve prepared for them as best we could.

ADVICE? 

Given all the stats in the numbered points I don’t have much. I am eliminating travel for the time being, unless it’s by car. I am watching what I buy at the grocery. I don’t need any more clothing at this point. I cancelled Amazon Prime to get rid of the temptation. When I cash my IRS refund check this week, I am taking it in cash to avoid using credit cards except for where I have them set up for auto-pays. I auto-pay my credit cards every month so it’s not a big deal in terms of interest rates but carrying cash curbs impulse buying.

Bottom line, all the depressing stats above and in my comments show just how clueless our “leaders” are when it comes to having a sense at all about how the complex cross-section of Americans live day to day. 

My daughter recently shared a list she got from Google Tips on how to cope. Here it is. Maybe it will help some of you think this all through.

– Cut your meat intake, get to know beans.

– Review your subscriptions, cut what you don’t really use. Enjoy your friends – show watching parties to cover all the different networks so you don’t need to pay for all of them.

– Get a library card. 

– Build your community, see if you can borrow a cake pan (or whatever) when you need it, not buy one.

– Simplify your products (ie bar soap instead of liquid, which is heavier and needs more inputs for packaging, use up what you have and really consider what you need).

– Water. If you must have bubbles, invest in a SodaStream.

– Eating out is for special occasions only – birthdays, anniversaries, holidays (but not ALL of them), and 

– Pack your lunch, and –

– Make your own coffee drinks.

– Google Depression Era Cooking 

– Ditch convenience, you can shred your own cheese!

– Don’t decide that this is the year you start a garden, that’s expensive. Find a friend who already rocks at gardening and see if you can contribute seeds and labor (help growing or processing and preserving – whatever you’re good at). Next year, buy cheap used gardening tools from someone who tried to start a garden this year.

– Talk to family about paring down gift season expenses.

– Take better care of your stuff. 

– Lay off fast fashion.

– Google intermittent fasting, OMAD, and ADF, it might be something with many side benefits. 

– Free body weight exercise apps and videos.

– Carpool, walk, take public transportation.

– Turn the lights off, put on a sweater, use a fan, open a window, unplug vampire items.

– Turn the temp down on the water heater and take shorter showers.

– Bring snacks and drinks when you go wandering. 

– Take some time to go through stuff and see if there are things you can enjoy that you already have – books you never read, crafts you never finished, etc. 

– Share the stuff you don’t want any more with a Buy Nothing or Free cycle type place – and if you want to try something new, see if you can find the stuff you need in same types of groups or at a thrift store.

– Leave stuff in the online cart for a day and see if you still think you need it tomorrow. 

– If you have stuff in storage, see what you can let go so you stop paying rent there too.

– Shop with a list. 

– Have fun with it 

                  Rich Heiland is a retired journalist and semi-retired consultant, trainer and public speaker. During his journalism career he was a reporter, editor, publisher, college instructor, part of a Pulitzer Prize-winning team and a National Newspaper Association Columnist of the Year honoree. He also writes the intodementia.com blog about his family’s experience with dementia. He lives in West Chester, PA and can be reached at [email protected].