Monthly Archives July 2019

Tips to Stabilize Your Finances

As families struggle through the current recession it is important to remember that this is not the first nor the last time that the economy will take a turn for the worse. In knowing this you should also know there are a few simple ways to prepare you finances to ensure you weather the current cycle and remain in a position to benefit when the economy takes it’s next turn; hopefully for the better.

  1. Have multiple streams of income- A few decades ago it was standard procedure to graduate from either high school or college and establish yourself with a company for the long haul. Those times have changes and if you wish to be financially secure it is important to understand the benefit of having multiple streams of income. Even if you have a great job with a great salary in times when the economy falters layoffs and downsizing become a reality many people are simply not prepared for. If you depend on just one source of income and you lose that income your finances can quickly take a turn for the worse. If you are fortunate enough to have a severance package you may be able to live off of that for a period of time, but you will eventually have to find another job and in the interim you may have to dip into your savings to survive.
  2. Diversity is the key- Similar to the first tip, having a diverse portfolio is the best way to protect yourself from losing everything in one fell swoop. The economy is simply not predictable enough at any time to have all of your eggs in one basket. Your age and the age at which you want to retire play a big factor in how risky you want to be in the market, but you should always spread your investments in a way that some money is safely tucked away slowly making more money.
  3. Manage your debt- An import lesson was brought to attention in the last year. Millions of people have learned that their spending and saving habits leave a lot to be desired. If you have debt now is the time to tackle it once and for all. If you can do it on your own by cutting costs and focusing serious energy and efforts toward debt reduction- then by all means go for it. Keep in mind that you will likely have to take a serious look at your lifestyle and make appropriate changes to ensure you do not dig yourself out of debt only to find yourself back in debt from using credit cards or overspending. If you are overwhelmed and your debt is making it impossible to move forward financially it is time to look into the various debt relief options available to you.

Bad Economy – Extreme Tactics

You may be thinking to yourself, I don’t need to hear anything about being tough in a tough economy, I’m doing just fine, and that’s what I thought too. My whole life I never got laid off and I never went without a Job unless I wanted to. Times are different now; you almost can’t be overly prepared.

So here are some of the things I wish I would have done a long time ago to prevent at least a little of the difficulty getting through this bad economy.

  • Tip one- Never say it couldn’t happen to you. When you think you are invincible you aren’t going to make any preparations for the worst case scenario. You might be thinking, it doesn’t matter, even if I lose my job I can get another one very quickly, and hopefully you are right. My question to you is what if you are wrong, are you prepared?
  • Tip two- Get prepared. Going through a really bad economy can be like going through a natural disaster, if you are like I was then you might say, I will always have someone to count on even if the worst happens. What if they are all going through the same thing? Developing a plan of action to rely solely on you is the only way to go. It’s nice if you can rely on family and friends but you may not be able to.
  • Tip three- Don’t live in denial. I can’t believe how many people, even when times are tough, still spend money they don’t have. You can’t bury your head in the sand. Be prepared to make extreme sacrifices. I had to sell almost everything I owned and at first I was devastated. Some of the things I missed, but I soon realized that most of the stuff I got rid of I didn’t even notice. I actually am glad I don’t have so much junk now, later when the good times are upon you again you can re-buy the things you really miss.
  • Tip four- Have the right mindset. Having a long term perspective about it all will make a difference. I’m sure it feels like the end of the world now but I learned from my own experience that very little of what I thought mattered actually did. Keeping a positive frame of mind will ensure that you get back on your feet as quickly as possible.
  • Tip five- Learn from the experience. I have had some of the greatest personal growth in my life during the tough times of the bad economy. I learned so much about myself, and my ability to persevere. I also learned what mistakes I will not make in the future. Every experience in life has a lesson to teach if you are willing to learn, even the bad ones.

Economies shift, markets vary, and the only thing that is constant is change. If you prepare during the prosperous times you will be more ready for the lean ones. When all is said and done, no matter how the bad economy affects things in your life, you will overcome it all in the end.

Economic Bandage Won’t Help Economy

The sub prime mortgage crisis began and just hit its peak, according to some economic analysts. In my opinion, it has been long in coming. The basic issue was that lenders issued mortgages at low rates that were adjustable. At the low rate, home buyers were able to squeak out payments. But, when the interest rates rose and monthly payments rose, the consumer was unable to pay. Many loans were given to people at the economic margin and anyone with an elementary education should have seen that those consumers could not afford a doubling of their payments. Anyone looking for details can easily Google “mortgage crisis” and get more financial information than you could probably use.

One may also recall the savings and loan crisis of the late 70s and early 80s which, according to some, led to the recession in 1991-92. Again, the approach was a bandage in the form of a bailout. And today, we see another bailout, but not a cure. Economic news has seen the current financial woes spread across the world thanks to globalization. The economic markets have become so entangled that if one suffers, they all are affected. This is kind of reminiscent of the web of tangled alliances that led to WWI or the “domino theory” of the Vietnam War era. We all know that markets have been consolidating and control of the economies in the world is spiraling into the hands of the few. Perhaps we should take a lesson from nature.

Diversity is a key for ecological health. As species diversity decreases, an ecological system may collapse. While this is actually happening in the environment today, it should serve as a mirror of our economic systems. As conglomerates grow, diversity is lost and economic systems face collapse. They talk of a tipping point with respect to climate change, the same hold true for economic systems. We are fast approaching the time when the bandage will not work because the system cannot heal itself.

Perhaps the primary reason that the system is in deep financial is “greed.” The powers that be continue to insist that we purchase things that we do not really need and that we do so whether we have the money or not. In one of my articles, “You Are Pre-Approved to Go Deeper into Debt,” I tried to show that we are deluged with offers to take out low interest loans or get starter low interest credit cards in order to purchase that new car, fix the house or take a vacation. Daily offers received in the mail or by email to buy now and pay later are very attractive to those who might be faced with financial difficulties. The offers of thousands of dollars now are even attractive to those with steady incomes who feel that that will be able to keep up in the hopes of growing incomes. Even with the current financial crisis looming over everyone’s head, these cheap credit offers still pour in.

The world cannot sustain wanton consumerism. It is one thing to produce and to purchase products that will enhance the quality of our lives or to decrease our dependence on vanishing fuel systems. It is quite another thing to buy for the sake of buying and to keep up with the latest trends in fashion, the newest junk toys and other products that will soon hit already overburdened landfills. It has been clear that large corporations are not treating consumers and the environment in a responsible manner. We are now in that “pay later” of the buy now syndrome and the question is, “Can we afford the price?”

Mr. Harris was born in Massachusetts. He attended The American University in Washington, D.C. and received his degree in Political Science. His graduate work was done at the University of Northern Colorado and Howard University. While in D.C., he spent several years working for local and regional government agencies. Upon moving to Maine he worked with three governors and served as the Assistant Director of the Maine State Planning Office. He worked on a White House Task Force for the development of a National Rural Policy and later served as Rural Policy Coordinator at the Federal Regional Council of New England. He has worked on gubernatorial and senatorial political campaigns and currently works in Special Education.

Creative Financing Techniques in a Down Economy

 

Creative financing can help most sellers to not only sell their property but may also aid in getting the higher asking price or very close to the full asking price.

Many buyers whether first time or moving into something bigger are looking for financing in an economy that is experiencing a big reform and stricter rules of extending credit. Banks at this time are very leery of government backlash if they do anything remotely close to sub-prime lending. The answer is creative financing.

Many sellers do not understand creative financing, but in this upside down slowly getting better economy a seller will have to understand creative financing if they wish to sell their property sooner rather than later.

Creative strategies such as lease option, seller assisted down payments, seller held second or even first mortgage. All can be better options than not selling the property. Use of these types of strategies can also help in selling a property close to if not the full asking price.

So instead of trying to wait for the economy to improve before selling your property, consider conventional and creative options with an open mind. Many sellers and buyers are going to have to start thinking in a different manner to be able to achieve results, understanding creative financing techniques is a step closer to closing.

Saving in the Current Economy

That is sometimes a really good thing because it is then that we actually realise what we waste money on. Not to mention that once you begin to cut back you can see that you are still OK and that if you had saved some of that money over the years you might have $30k in saving’s right!:) I know that a lot of us are now forced into being more conscious of what we are doing to the point where people are actually growing their own vegetables and using their mind’s to think outside the box a little more. We have had to do this for Millennia really so it is no different now. See what I mean there? You see that a perceived negative situation can bring about forced change that actually starts us thinking a bit more about being industrious instead of just living or existing each day like a cycle of negative perceived reality of the downturn, which I think is wrong anyway.

What can you do now to cut back? What can you do that might have a profound affect on your next ten years of life? What changes can you make that might seem quite small but could have quite large positive changes to your financial/mental/physical future? It might be something as simple as eating more fresh grown vegetables or fruit which helps your health right!:) Try and figure out in all areas of your life where you start to gradually implement positive changes that will assist you in a brighter and more abundant future. I bet you will have at least a few things you can do this week, I know that I have!

we are currently in a financial crisis or economic downturn. Now this can actually be a good thing. How? Well it is because it will get people to think outside the box when it comes to spending. Actually when there is mass panic about money is when most clever people make money because everyone else is hanging on for dear life to what they have and taking no risks. So how can you save more money now and create a secure future? You can start by looking at your shopping list. How much rubbish do you buy? How much is spent on Cereals for example? I know me and my girlfriend will buy just one cereal that is healthy so not only are we spending less but we might even live more. Cool huh! It doesn’t take much to begin breaking down your monthly expenses and cutting back.

What you might even do is go for a smaller car? Or wipeout an expense that is not actually needed. Let’s say you go to the Gym ok, well how much do you pay per month? $30, $70? Well ever heard of running,swimming,walking,badminton,cycling,press ups, situps? You can save your monthly Gym costs right there. What about getting your hair cut, do you go expensive or cheap? You are getting the idea by now huh!:)

So first of all look at all of your outgoings, then eliminate any that are not needed at all, then adjust the outgoings to cheaper versions of what you buy, like value groceries. After that you can look at your fixes, what do I mean? Well Alcohol, smoking, junk food, commercial coffee shops, general luxuries that you really could do without especially for your health.

Let’s say that you save $50 per month well that’s $600 per year or $6000 over ten years, or $18,000 over 30 years. Cool huh! It won’t take much to get to that level of saving and then when you retire you will have maybe $20k in savings that you didn’t miss. This all depends on your ability to save more and then either live much more comfortably in the now or have a hefty lump sum when you retire. Hey it might even allow you retire a few years earlier.