Keep Your Cool during this Financial Meltdown
Presented by Cozee Cackel
The country’s economy might be down in the dumps, but that is no reason in itself to panic. You have probably already lived through a previous downturn if you are an adult. This is not the first one, although it could be the worst.
A financial meltdown or a recession should not stop you from your goals. Maybe it affects you financially but remember it will not last forever. Everywhere you go, you hear about how awful the economy is, but you don’t have to let all the talk of our country’s financial meltdown get you down. You can keep your cool.
Don’t let fear of the future take control of your mind and emotions. When we live in fear, we make bad decisions, think irrationally, and are in a reactive mode. Living in fear actually makes the situation far worse than it needs to be.
To reduce or overcome financial future fears, consider these proactive things:
- Turn off the news. Why would you want to financial meltdown news over and over? We already know the state of the economy, so listening to doom and gloom talk all the time is not necessary.
- Ensure you’re on a budget and living within your means. If you need to cut back, then find ways to do so. There are many ways to reduce the cost of living. It may take some planning and effort but it can be done. Some examples:
- Reduce your cell phone bill
- Get rid of your land line phone if you have a cell phone
- Shut off the TV cable
- Turn off unneeded lights
- Unplug electronic devices if not in use
- Turn your thermostat down in winter – wear sweaters if necessary
- Open windows in the summer – make minimum use of the air conditioner
- Use coupons – shop for weekly sales at the supermarket
- Set up an emergency fund. This involves living on a budget. Then you can save some money from for emergencies. Try for a minimum of $1,000 in savings, to be used for emergencies only, like unexpected vehicle repairs or medical needs. Save more if you can afford more!
- Get rid of debt and use cash only. Again, this requires living on a budget, but it can be done.
How to Budget in a Recession
Since we’re talking about budgeting so much to keep your cool during the financial meltdown, let’s talk about ways to set up a budget and reduce debt.
- Determine your income after taxes. Know your monthly take-home pay so you can determine how much you have available to spend. It’s obvious, but it is so common for people to spend way more than they make. Way too often, people don’t know how much they really make. Same goes for where the money goes!
- Make sure your living needs are met. These things include your house payment, utilities, food, and property taxes.
- Take care of your transportation to and from work. Things like your vehicle payment, gas and maintenance. This is one area you may be able to cut back on as well. If you’re making a car payment, try to sell the car and buy a used one with cash. You may also want to consider taking public transportation more often.
- Pay off credit card debt. Start paying off the card with the highest interest rate first. Once that card is paid off, put your payments toward the card with the next highest interest rate and so on, until each card is paid off. You may also want to contact a financial planner to discuss consolidating the debt to make it more manageable.
- When your credit card debt is paid off, put all the money you were paying them into savings. The goal is to build at least 6 months worth of income in case something happens, like job loss or disability.
Follow the steps above. Use diligence and determination so you can be debt free and survive the financial meltdown! Now this won’t happen overnight so you’ll probably have to adjust your lifestyle. Try to live below your means. It may not be easy, but doing so will help secure your future financially.
Cozee is learning about luck.