What can we now expect? Our economy is going to sink. Nothing can stop it or slow it. And circumstances like this aren’t going to improve. How can you protect yourself, cope with this crisis, do what it takes to survive and ultimately prosper once the ship goes down? Part 2 of my 3-part series: Economic Recession (Part 2) examines these questions and provides answers.
At first blush, the article may seem like a tsunami of doom and gloom. But those who have been through an economic emergency will tell you that such a series of global events makes economic planning all the more important. It’s extremely difficult to make economic plans when the economy is in turmoil. However, if you have had such an experience, have a strategy in place and are ready to endure the next tough financial blow, planning your financial life now can be more than just prudent. Here are some immediate actions and steps you can take to supercharge your financial emerging from this financial emergency:
• Review your credit card debt. If you have yet to see the prices you are paying in terms of interest (and annual fees) and credit (annual fees) you will understand very well just how much you are paying for a credit card. It’s also possible to compare the cost of many credit cards and obtain a good deal. You just have to develop a critical and patient eye. Many people avoid looking at this until it’s too late and they’re stuck with their head-aching credit card debt, maxed out, because they never planned ahead.
• Save money for an emergency. It’s more realistic to say: if you haven’t saved money for such an emergency, you built bad credit and debt in the past. Start putting money away now. Do it now. If it’s been a few years and you’re starting to get back on track, especially when it comes to investing money, start putting money away for investing. MarkSpeed Cayayand Fortigate reports that Americans save 4 percent more money at age 65 than a decade ago even as the stock market is returning in 2006. So Americans are doing it and will eventually have their money tied up in a savings plan. There’s no use saving money today if you blow it on high priced, non-essential items because you didn’t plan for emergencies in the past.
• Do some financial maintenance. As noted in Part 1, you should continue to make your regular scheduled bill payments in full and on time. However, if it’s too much for you to do, start writing just a bit each day for that goal. Nothing like taking it a few days a week to do that, too.
• Keep funds for emergencies and investments where they’re off limits. Throw your credit cards away and avoid carrying them around. Save your credit cards for emergencies only and where you have no other option. Set up a “vulture fund” that you take funds from while you need that funds. And lastly, avoid investments that carry excessive fees, loads of paperwork and high minimum balances. You, like smart investors, are taking on the devil you know.
• Stay in the game. That means continuing to participate in the stock market, mutual funds, 401(k), IRA and other retirement plans. Pay attention in the news to see how your home and/or your employer’s retirement plan might be affected. Keep your eye on the goal, time and effort that your commitment provides you with each year.
• Advise your partner about any financial emergency, even something that requires reducing your contributions to the company’s plan to save money for a hospitalization. You may be helping to create a corporally induced surplus to help normalize the system — along with all the profligate bailouts.
The time to plan for a financially emergency is before it happens, not after. But there’s no time like the present to get started. Roush expects at least 15 minutes each working day to update and fine-tune a self-help plan in preparation for Whatever Would Happen.