Finance On Wheels

Americans to survive the current financial turmoil

So, how are we as Americans to survive the current financial turmoil and come out of the other side better off? Here are some positive steps I would recommend:

Reduce outgoings and debt load

Make a budget and stick to it. First list all your income. Then list all your essential expenditure. Remove all expenditure that does not directly support living. Food, housing costs, home to work transport, and essential supplies (personal hygiene, cleaning supplies, etc) are what I would term essentials. All other expenses: cable TV, personal cell phones, eating out etc are non-essentials.
Use the increased difference between income and expenditure to pay off debts; auto loans, student loans, home improvement loans, mortgage etc. The more debt you can pay down, the more money you can have to build an emergency fund and for long term investments.

Increase income

If possible, find ways to improve your income. At work or in your business, always deliver more than you are asked to do. Those who do this will be the last to be laid off or dismissed. Find ways to help the company make more sales. Even in this depressed economy, there are lots of opportunities.

Maintain your Investments

Don’t panic. Selling off your investments in a down trending market may not be best policy. You should be investing for the long term and holding on to your stocks and mutual funds. Those using dollar cost averaging stand to make great gains when the market recovers. Just stay the course. Any investments you have in cash would be good to leave alone, unless you have great concern with the liquidity of the holder of the funds. Bear in mind that conventional banks are the least affected by the current crisis as they are the most regulated.

Doing the above, especially reducing you debt load, will go a long way towards insulating you from further turmoil in the financial sector. It will also put you in a far better position to take advantage of the improved financial landscape when the crisis finally ends.

Author
Malcolm

Posted in Finance On Wheels |