Worry about finances is sweeping our nation as things are starting to get ugly in a lot of ways. Here are a few financial tips for riding out an economic downturn and getting more bang for your precious buck.
Start to plan now for the possibility that things may get worse. Technically, we are not in a recession at this point. However, for many people things are feeling like a recession. Even if this can’t be called a recession right now, we are definitely in a period of economic decline and slowdown. Don’t dwell on the technical definition. Look at things from the perspective of your individual situation. If you feel OK financially, then plan ahead for the possibility that things may take a turn for the worse. If you’re already suffering financially, then start thinking about ways to handle it.
An economic downturn, slowdown, and recession effect lots of people. Remember that others are likely in the same position and everybody is dealing with similar issues.
It’s important to know your income and expenses. Make an accurate list of what your income and exactly what you spend. Track all of your expenses – even the little things like coffee, pasteries, movies and rentals, etc. These are the things that really add up. You will likely be shocked at how much you are really spending when you track everything.
Debt is money that you owe – your bills. There are good bills and bad bills. The good ones are those that are necessities – shelter and utilities. You have no choice about these bills. We get ourselves into trouble with the bad bills. These are the luxuries. Credit card debt is the worst evil. It gets many of us into a lot of trouble. Control your credit card debt above all else!
Debit cards work differently than credit cards. The biggest difference is that they aren’t loans like credit cards. When you use your debit card the money is taken out directly from your account. Therefore, if you don’t have it in your account you won’t be buying anything. This gives people a huge dose of reality and really helps to control spending.
Try to pay down your debt. If you have $10,000 in credit card debt and you pay even just a little more than you regularly pay you’ll save a lot of money. That is because the interest you’re accruing is being reduced. By increasing your payment amounts by as much as you can you will cut your interest and you will pay off your debt much sooner! This same principle applies to all forms of debt – car loans, student loans, personal loans, etc.
You would be surprised at how much money you can save by eating in instead of eating out. It’s much cheaper to buy food at the grocery store and cook it at home than to eat out. If you buy food in bulk you will save you even more money.
Instead of buying sodas or juices, try water. Not only is this much healthier for you, you’ll save money.
Depending upon who you listen to, the financial situation facing our country could be catastrophic or a minor speed bump. However it ends up finding ways to save money will likely be a reality for a lot of people.
