Of all the times you could choose to ignore your finances, now would not be the time. Between the banks being more choosy about who they lend to, the unemployment rate nearing 8%, and the future of the economy in question, now is the time you should be paying the most attention to your finances! When everything was good, I was nowhere near as careful with where my money went as I am now. And even though I am self-employed and have only really felt a little of the downturn, I am sure I will anytime now and I need to stay vigilant about our financial situation. So while it may seem easier to just ignore what is going on because it is so depressing, you should be doing just the opposite – taking stock of where you stand, what you can do, and where the future might bring you. Because I have been giving some thought to how we will survive if the economy continues to plunge, I figured I would share some of the things we are focusing on right now.
Scrimp & Save Your Pennies
This is something that while not entirely new to me, is something we are certainly implementing right now yet again. Because of our move to a smaller, less expensive town and that fact that our income stayed the same when we did so, we were living high on the hog. Going out to dinner way too often and not worrying about our expenditures were starting to take their toll on our bank account balances, and because I don’t want to go back to a 9-5 job to earn more money we needed to make a change. So we started really tracking every penny and watching unnecessary expenses. It is amazing how much you spend when you are not paying attention!
Pay Off Debt That Is Not Related To Your Home, Your Education Or Your Car
While we do not have credit card debt anymore, if we did it would be a priority to pay it off asap. Credit card companies are closing accounts, changing terms and interest rates left and right, and I would not want to be surprised with a balance that is all of a sudden being held at some ridiculous interest rate. And with the reduction of 0% balance transfer cards available, you might be stuck paying whatever they want to charge you. So please, if you can at all, pay off your credit card debt. Mortgages, student loans, and auto loans are usually going to be left alone, so concentrate any extra money you can at your credit card debt. Being free of this debt is quite a load off and you will thank yourself later for getting out from under it.
Start Following A Budget
Back in September, I wrote about how we were following a budget again…and then we quickly fell off the wagon. Mainly it was because we were starting to look at real estate to buy, but since we have now put that on the back burner, the budget went the way of the do-do. But we definitely need to get back into it, because as I mentioned above, we need to start seeing where our money is going. Moving here has allowed me to support our lifestyle while being self-employed, and I would like to keep it that way. So if we are wasting money somewhere that we shouldn’t be, we need to get that back! I still use a free budget template document from Google Docs, and it works just fine. If you are not budgeting, you need to start right away!
Look For Ways To Earn Alternative Income Outside Of Your Day Job
Blogging for me started as a hobby – something to do at my day job when I was bored. I started The Good Human 3 years ago on a lark, and then it slowly started making me some money on the side. Then in November of 2006 I started My Two Dollars, and after about 6 months it too started to bring in some extra cash. I was also doing some web design and blog consulting on the side and started doing some website maintenance for a few companies. Soon enough, all the alternative income I was making turned into a full time job and a full time income – and I have been doing all these different things since then to support us. If you work a day job, there is no reason you cannot turn your hobby/art/blog/skills into extra income starting right now. Don’t let anyone tell you that you cannot do it; if you are determined to make some extra cash, you can most definitely do it. You just have to put in the effort.
The most important thing you can do is to pay attention. Don’t ignore your bank statements, look at them when they come in. Track your investments. If you are not sure about them, talk to a professional and make sure you are on the right track for when the economy comes back. Times are tough; ignoring what is going on could (and probably will) make things worse for you and yours. So don’t bury your head in the sand; hold it high and look around. It will do you way more good up there.