January 20, 2014
by Emily Guerin, Inside Energy reporter for North Dakota.
Call it a bust. A correction. A slowdown. A time to catch our breath. Whatever your euphemism, the numbers don’t lie: the price of oil is down, way down and that’s had a huge impact on North Dakota, the country’s number two oil-producing state. It’s also had a big impact on me. I moved to North Dakota in June 2014 — pretty much the beginning of the end of the boom, although I didn’t know it at the time. Back then, North Dakota was the last bastion of the American Dream, a place where anyone with a high school education and a willingness to work could get a good-paying job. It felt like everyone was hiring, everyone was optimistic, everyone was hustling.
Almost immediately after I arrived, things started to change. There were signs that summer that American oil companies had gotten too good at producing oil from places like the Bakken, creating a glut. Prices started sliding on their own, but then in November, OPEC decided not to cut back on production, meaning the world market would continue to be saturated with oil. Prices fell faster after that. As one oilman told me right around the OPEC decision, “We’re not slitting our wrists, but it’s terrible.”
Over the past year, I’ve been asking people from truck drivers to RV park owners to school superintendents how the falling price of oil has affected them. And along the way, I’ve gotten a lot of unexpected financial advice. So I’m passing those tips along to you, dear readers. Here are five things I’ve learned about managing my money from reporting on the oil bust.
1. Don’t adopt an expensive lifestyle that traps you in a job you hate.
Last week, I met a truck driver who had been hauling crude oil for four years. That’s three years longer than he intended. Why did he stick around? Because he and his wife got giddy with his six-figure income and bought a new truck, a boat and other shiny things. Suddenly, he needed that income to make the payments on all those new toys. It’s called “the golden handcuffs,” and it happens to a lot of oilfield workers. If you don’t like your job all that much but it pays you well, don’t get accustomed to an expensive lifestyle. It will make it harder to quit.