Bad times ahead? Here's how smart people are preparing
Posted
Sep 29 2008, 10:23 PM
by
Karen Datko
Rating:
While we're all anxiously awaiting the fallout from our nation's financial crisis, here's some sound advice echoed by personal-finance writers around the blogosphere: Now, folks, is the time to get back to basics.
If you're not living within your means, start. Get out of debt -- and save. Says Ron Haynes at The Wisdom Journal: "Nothing fancy. No shrewd moves. No collateralized debt obligations, no mortgage-backed securities, no credit default swaps or anything that isn't easily understood by a fifth-grader."
In other words, it's time to get your priorities straight. "We may not be able to do much about the three-ring circus in Washington," says "FZ" at Frugal Zeitgeist, "but we can and do all make choices in our own lives that will impact our future financial health." Here are some suggestions:
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Pay off debt. "Savings Not Shoes" made this pledge: "Credit and I, who haven't ever gotten along, are finally severing our relationship. I will not ever carry a credit card balance ever again in my life."
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"Spend money like a smart person," Steve at brip blap says, adding, "Nobody needs a new TV now."
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Save, save, and save more. Read Our Fourpence Worth's "101 ways to save money in your everyday life."
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If you still have a job, work harder to keep it. FZ says that "it's increasingly important to do my job well and circle the wagons even more within my team: If we don't all look good, none of us look good."
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Keep giving. Paula Wethington at Monroe on a Budget reminds us that for some people, times are already tough. "Soup lines? We've got them in Monroe County, Mich., a small town/rural community south of Detroit," she writes. "Seven days a week, a different church in the city of Monroe hosts a free dinner for 80 to 140 needy people." Monroe is by no means alone.
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Don't pull money from your retirement accounts. "My Journey" at My Journey to Millions is alarmed that people are removing money from their 401(k)s early, which triggers a big penalty.
Even if the economy were fine, we figure "Neimanmarxist" at The Reductionist would still be facing up to her debt. We like her attitude. "I think it is a real sign of the general sense of entitlement ... that having to stop spending in order to pay back debts one owes is seen as some kind of huge unjust chore ...," she writes. "No, no. Paying back the debts one owes is just a way to start living right, instead of living wrong, the way we were."
Or, as FZ says: "I think that while most of us have a tough road ahead for the next few years (and for some people, that's going to include genuine suffering), for many people this is an opportunity to walk away en masse from the spend spend spend consumeristic madness into which much of the contemporary culture has devolved."
