Written By
MTE Elite Member: Gerri Harrison CFP EA
(Click) Gerri's Website
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If you are a news junkie times are looking really scary right now. With the Dow dropping over 2000 points in one week, a 700 billion bail-out, global markets closing due to record drops, England bailing-out its banks, a large company in Japan going under, credit markets remain frozen and on and on.
You need to remember though that it is big headlines that sell. I am not going to say that we are not in for some rough times. I certainly believe we are either in or headed for a recession. When your head starts spinning because of all of the national and international news, take a step back and look at your own personal economy. That is what really counts.
Is your job safe? Although no one can guarantee a lay-off might not be in their future, how safe is your job? If it is not, then you need to start preparing. Improve your skills by taking classes or maybe training for a whole new career. Join networking organizations to establish contacts that may be valuable later. Make sure your resume is up-to-date and accurate. Make yourself invaluable at your current job by taking on special projects, coming up with cost saving measures, being flexible and available.
Is your personal financial situation in good shape? Do you have an emergency fund of at least six months expenses, maybe even twelve? Have you gotten rid of all debt – other than that mortgage? If not, you need to go into expense cutting mode and work to get that emergency fund in place and get out of debt.
Expense cutting mode means nothing is sacred other than the roof over your head, food on the table, and health care costs. The time is to get extreme. Get rid of cell phones, cable, and Internet. No more eating out. No new clothes or household items. Every expense must be questioned. Even as far as taking the car of the road and using public transportation. Consider a second job, starting a small business, or taking in a roommate to raise income.
Review your credit report for free at http://www.annualcreditreport.com/. If there are errors get them corrected. The lower your credit score, the harder and more costly it will be to obtain credit. Work hard to make debt payments on time. Get the percentage of debt that you are using down to less than 30% of the total available.
Credit scores not only affect your interest rates on debts. Insurance premiums paid are affected by credit scores. Many potential employers and landlords are looking at credit reports.
Yes, your 401(k) or other retirement plan and the value of your house may be deceasing. If you do not sell these assets and give them time to recover it is only a paper loss. It is hard to swallow, but it will get better. Probably not tomorrow, probably not even next month, but it will happen.
What counts more is your cash flow today – the ability to pay your bills, to survive a job loss, to get your kids through college in the next couple of years. This is where you need to spend your time and energy right now. This is what will reduce the fear and out-of-control feelings.
(Click) Gerri's Website
(Click) Gerri's Blog
If you are a news junkie times are looking really scary right now. With the Dow dropping over 2000 points in one week, a 700 billion bail-out, global markets closing due to record drops, England bailing-out its banks, a large company in Japan going under, credit markets remain frozen and on and on.
You need to remember though that it is big headlines that sell. I am not going to say that we are not in for some rough times. I certainly believe we are either in or headed for a recession. When your head starts spinning because of all of the national and international news, take a step back and look at your own personal economy. That is what really counts.
Is your job safe? Although no one can guarantee a lay-off might not be in their future, how safe is your job? If it is not, then you need to start preparing. Improve your skills by taking classes or maybe training for a whole new career. Join networking organizations to establish contacts that may be valuable later. Make sure your resume is up-to-date and accurate. Make yourself invaluable at your current job by taking on special projects, coming up with cost saving measures, being flexible and available.
Is your personal financial situation in good shape? Do you have an emergency fund of at least six months expenses, maybe even twelve? Have you gotten rid of all debt – other than that mortgage? If not, you need to go into expense cutting mode and work to get that emergency fund in place and get out of debt.
Expense cutting mode means nothing is sacred other than the roof over your head, food on the table, and health care costs. The time is to get extreme. Get rid of cell phones, cable, and Internet. No more eating out. No new clothes or household items. Every expense must be questioned. Even as far as taking the car of the road and using public transportation. Consider a second job, starting a small business, or taking in a roommate to raise income.
Review your credit report for free at http://www.annualcreditreport.com/. If there are errors get them corrected. The lower your credit score, the harder and more costly it will be to obtain credit. Work hard to make debt payments on time. Get the percentage of debt that you are using down to less than 30% of the total available.
Credit scores not only affect your interest rates on debts. Insurance premiums paid are affected by credit scores. Many potential employers and landlords are looking at credit reports.
Yes, your 401(k) or other retirement plan and the value of your house may be deceasing. If you do not sell these assets and give them time to recover it is only a paper loss. It is hard to swallow, but it will get better. Probably not tomorrow, probably not even next month, but it will happen.
What counts more is your cash flow today – the ability to pay your bills, to survive a job loss, to get your kids through college in the next couple of years. This is where you need to spend your time and energy right now. This is what will reduce the fear and out-of-control feelings.
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