Tax time is behind us, and with that being said, we always learn a lot about what is really going on in the economy, how people are handling their finances, how the new tax laws effect the general public, and what people are thinking about their earnings, their spending, and their savings. Seeing “the street” first hand always educates us …here’s what’s happening:
People are looking for new and creative ways to subsidize their earnings. Home based businesses are on the rise…skills are being sold on the sly…and exchanging of services seems to be more common than ever. Cash has become king…especially for those people collecting “benefits” like unemployment, disability and social security…they’ll do just about anything for some extra $$$ under the table that they believe comes their way tax free.
Bankruptcy has become the norm. People are walking away from their credit card debt, their mortgages, their small business lines of credit,…all with their credit scores, or lack thereof, being ignored. It’s a live for today and don’t worry about tomorrow mentality…with no regard to financial security or future ramifications
Foreclosures are still running ramped to the point now that it is affecting even those who are working, making a significant living, and can easily afford their house payment. Now, it’s all about value and the fact that their home is “under water ”(worth far less than they owe) so they have decided to hold off on paying on their commitments , waiting for the bank to make them a better offer.
Tax reporting is sluggish …many have not filed, lots have extended, and millions are not paying. As a matter of fact, the number of payment arrangement requests are so high, the IRS is now using a computer generated program just for that purpose. In addition, the audit process is on the rise to make sure that all the new credits…homebuyers, energy, education, sales tax …that everyone is taking advantage of are totally and completely “legit”.
The aftermath of last year’s recession has not been pretty and has affected millions of people …especially here in Michigan. The recovery will be slow, sluggish and steady, so many will never recoup their losses. For 2010/2011 the words of the day will be: “rent” (rather than buy), “borrow” (rather than own),”used” (rather than new). What we have will be shared, what we buy will be necessary, what we waste will be minimal. Money will definitely go green…whether we like it or not!
