Is The Sky Falling

Sky Is Falling by Christian Mcleod

"If you can't sleep, then get up and do something instead of lying there and worrying. It's the worry that gets you, not the loss of sleep." -Dale Carnegie

Things are tough out there are possibly getting worse. As American taxpayers, we are now part owners of million dollar homes, shopping malls, investment firms and we are also in the insurance business. All of this is due to the recent government bailout of many firms, all in the name of saving the American economy.

I understand that I am getting a bit judgemental about things here. I am just a frustrated taxpayer like many others. I could write and complain for many paragraphs, yet it wouldn't accomplish much other then making me feel slightly better.

What I can do is offer some tips that I collected to help you possibly ride through this cyclical thing we call the economy.

No. 1: Do not panic. The sky is not falling and yes, there will be people that get hit hard as many have already. But to panic will not do you any good. Sit back, stay calm and start thinking of ways to find your way to the other side of this.

No. 2: Prepare for adversity. We don't say this enough, early enough to our kids and to ourselves, save, save, save. By establishing emergency savings and preparing for these times will soften the blow. Now that we are in a downturn doesn't mean to stop saving, keep saving if even in smaller increments.

No. 3: Tighten your spending. Go over your personal spending with a fine-toothed comb and look for areas to cut back, such as dining out and entertainment. Put big-ticket purchases on hold. Downscale or delay vacation plans. Look for bargains and shop for the best deals.

Even though the economy rides on the shoulders of consumer spending, people must contain their expenditures during a slowdown. Otherwise they are at risk for personal financial crisis, experts said. "Overall, more consumer spending is obviously a boost to the economy, but at the individual household level, more spending may not be the prescription for your financial ills."

No. 4: Proceed with caution. You need to continue to spend and invest, but be more cautious, especially if you fear that your job or your company may be at risk. Life requires living and to live we do need to spend some amount of money. But evaluate your your job or industry. If either seem tenuous, you should be more conservative about your spending until the economy strengthens.

No. 5: Plastic Diet. The credit-card rates continue to soar reaching into the 20 percent range. Cut down usage or pay it off; it's like earning double-digit returns on your money by cutting out credit card debt. Easier said then done, families in shaky financial condition or uncertain employment may have to make a difficult choice. If your earning are steady and secure, then continue to whittle away at the credit-card debt. For those people with unstable incomes or a chance of being laid off, it's better to beef up emergency savings. Just know that those interest charges will build, so curtail credit-card spending to limit the growth of those credit charges.

No. 6: Manage your credit smartly. Check your credit report routinely and keep your credit score high so you can get favorable interest rates if you need to obtain financing. Pay bills on time, even if it is just the minimum required. Don't open a lot of new credit-card accounts. Don't respond to repeated "special offers" for credit cards in the mail or online. Resist the temptation to get discounts at retailers by opening an in-store account.

No. 7: Think fuel efficiency. Consider buying a more fuel-efficient car. Just remember, though, that spending on gasoline is a small part of the budget for most people, about 5 percent, and trimming your gas mileage likely won't make a huge difference in your budget's bottom line. If you take on a higher auto payment, you might even end up with less discretionary income at the end of the month.

So there it is, seven tips and by reading, I am positive you will find more great advice out there. I'm no financial expert, but want to ensure each of you have an idea of what can be done. Keep your focus, keep your attitude, keep your sanity and you will get through this.

Many have before us; Wall Street Collapse of 1929, the "dot-com" bust of the late 1990's and many others have shown that by staying calm and sensible, you will survive. I fully understand it doesn't seem that way when you are going through it. I was first married in 1980, with a child and the highest interest rates our economy had ever seen. I had thoughts that we would never make it through, but we did...so will you.

So those seven tips...the number seven that I've written about before. Take a few minutes, possibly seven, reflect and consider what you do have. It might be the most important seven minutes of your day.