Optimism is a simple ingredient of success we all have in our hands. The financial downturn has brought a lot of challenges to the average U.S consumer; yet, we all still thrive to earn a living from just about any means possible. Even as access to credit has become harder, families willing to adjust to a new era of spending within the confines of one’s income could live a life without the stress or fear of a doom’s day “everything’s going to get difficult” predictions of the pessimists out there.
Taking advantage of this downturn means making bold choices in more than one aspect of life. You might have to cut down on those unnecessary purchases, eating outs, etcetera, but all for the greater good of coming out tops with greater financial security at the end of the day.
Live within your Income
Imagine finding yourself in a situation where there’s not much money to go around cause your income hasn’t increased in proportion to the rate of inflation, and your kids still need money for school, but there are credit card bills and a mortgage to be paid, not forgetting that the utility bills are also outstanding. – What do you do?
Living within your income doesn’t mean not going on vacation during Xmas or buying the latest high-end notebook. It means not doing so when there are more important things to spend money on.
This period has given Americans and residents in other 1st world countries the privilege of spending less on the groceries and shopping than they normally would. Coupons are now taken more seriously as everyone wants to cut costs. If you haven’t started taking advantage of coupons, discounts and other freebies shopping malls have put in place to balance a generally low consumer spending, now’s probably the time for you to do so. Unfortunately, even as the number freebies available out there increase in giant numbers, increasing world food prices may mean your grocery expenses may be higher than you’re used to.
Except you’re the spouse of a politician or bank CEO, you probably don’t want to go on an expensive vacation during this period. Now is the time for budgeting, wise spending, and saving for retirement.
Invest in arising Opportunities
Due to the governments’ bailout, mortgage prices are expected to experience a free fall over the next couple of months. For consumers with enough cash to spare, lower mortgage prices could provide the opportunity to get beautiful homes at cheap prices.
Pay fewer Taxes
Throughout 2008 and 2009, the government provided tax cuts in a few areas. If you aren’t yet to take advantage of these cuts, now’s probably the best time to do so. Fewer taxes means there’s more money to spend and more money to invest into a retirement account.
Don’t follow the crowd
Just because the neighbors had a bad time investing in stocks doesn’t mean you would also have a bad time. A holding position is usually the most favorable position to take during a downturn. Except the company goes bankrupt, the market is likely to bounce back and then you can sell to recoup your initial investment. Bottom line is do not sell investments in panic. Consult a financial advisor before making investment decisions.
A financial downturn usually is a period when lots of people say “Oh! I wanted to up my investments into my 401(k) but it seems now’s not the right time.” Procrastination is a disease that affects a whole lot of us. Certain situations might make it seem like, now’s not the right time, but believe it or not, there’s never a right time. A time of crisis is usually a time when people who do things wisely get rewarded in bountiful amounts and just because you haven’t heard cries of victory from a friend doesn’t mean the world’s in stand still. So do whatever it is you’ve had in mind be it investing in stocks, business or purchasing a holiday truck. Of course, you’re always going to want to balance things up by reasoning it out and consulting others to ensure your decision is the right one, but don’t hide in the hole.