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Wednesday, October 8, 2008

Better late than never. . . .

In scanning personal finance websites, I'm always sucked in by titles that suggest that the author can help me survive this 'economic downturn'. Although I think I'm in fairly good shape now---assuming I don't lose my day job---I'm still not feeling totally comfortable with my day-to-day financial life. I think this is primarily because I'm a news junkie, and reading about 300 or 400 or 500 point drops in the Dow make me jittery, regardless of my miniscule retirement investments.

The articles that make me incredulous are the ones that purport to tell Americans what to "do" with their money, now. The little voice at the back of my head always asks , "what money"? Perhaps because we're hearing the worst-of-the-worst news day in and day out, I imagine that no one has any extra money to invest.

In any case, I definitely lean toward articles that give commonsense advice to people who may already be in financial difficulty, but who, with some discipline and hard work, can weather the storm and come out of this crisis without losing any more money than they already have. With that in mind, here are some ideas gleaned from recent articles that resonated with me:

  • As painful as it may be, take stock of your financial situation. List your debts---all of them---as well as your income. Take a close look at how much you're spending on a daily, weekly and monthly basis, and compare that to how much you're bringing in.
  • Pay the most important bills first, if you have to make a choice. What's more important? Paying the cable bill or the electricity bill? I'd say electricity, personally.
  • Call those credit card companies, and ask for a lower interest rate. This has worked for me on multiple occasions---they're not going to offer this to you, so you have to be the one to ask.
  • Speaking of credit cards: STOP using them! Unless you've got a major emergency, those credit cards need to stay in a drawer at home.
  • Pay more than the minimum on your debts. Due to my second job, I'm able to pay much more than the minimum on my credit card---plus I throw any additional income toward my credit card debt. Because of this (and the fact that I canceled cable, my gym membership, and other 'luxuries') I will hopefully have my last credit card paid off by November!
  • Speaking of second jobs, consider getting one. Although my second job only brings in about $600 a month, this has been instrumental in getting my financial house in order. An added benefit is that it lowers my stress level when considering a job loss (this isn't going to happen, but I'm a worrier. . . .)
Although I started doing most of these things almost a year ago (!!), even if I started tomorrow I would be better off than if I never began at all. To paraphrase a popular quote:
"The best time to fix your finances was yesterday. The next best time is today."


Frugalchick said...

Great quote!

marci357 said...

I am probably sticking my head in the sand, but I am not worrying about the crisis, for me personally, therefore, I can sleep at night.

What's the worse that can happen? I could lose all my money, my IRAs, my PERS, and SS, and my job. I think I'll still be ok. The house is paid for - and my bare bones emergency budget is under $400/month, under $300 if I defer the property taxes for up to 4 yrs.. I don't think all the pieces of the pie would get lost at the same time. Therefore, I'm just not going to waste time worrying.

About that cable bill vs electricity - I think if one is even close to that situation then the cable should have already been shut off. You can sure live without cable. Ok, so you can live without electricity too, but it's just nicer with it! :)

I don't feel the need for a 2nd job, but it's a good thing for those who want the extra security. Whatever makes you sleep better!

And congrats on that card scheduled to disappear in NOV! WHOOHOO!!!! Way to go!

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