While experts predict we will have a harsh winter, it pales in comparison to the financial crisis prediction that we should brace ourselves for a more difficult road ahead. In the first three weeks of October, the stock market’s volatility was considerable, unemployment statistics rose, and a total of sixteen banks closed. And even though oil prices have declined, it is predicted that production will be reduced next month by 15 million barrels, home foreclosures increased, and home equity decreased yet again.
At a time when the Rescue Plan may have eased the credit crunch to some degree, the dollar has seen a significant decline globally. As nations try to cope with this financial crisis, some experts insist that we have not yet hit the bottom. Everyone is worried; there is no denying that. As early as October 24th, fears of a global recession have come to fruition with its first victim: Great Britain.
In light of recent events and in order to prepare for what is certain to become a difficult road ahead, here are ten ways you can prepare for any eventuality.
1. Take stock of your financial assets. If you have a household budget, you may have to reassess each item to determine where, if anywhere, you can make additional cuts.
2. Put away enough savings to cover expenses for at least 18 months up to two years.
3. Pay down as much debt as possible.
4. Check your insurance policies to ensure they are up to date. If necessary, raise the deductible from $500 to $1000. This can yield up to 25% in savings.
5. Call credit card companies and ask to have your interest rates reduced.
6. Bundle your TV, internet, and cable services through your cable or phone company.
7. If you have a landline and cell phone, you may wish to get rid of the landline and utilize the cell phone exclusively.
8. If you spend a considerable amount of money on entertainment such as movies, theatre, or sports events, it may be a good idea to suspend these activities for a while and put the money saved towards the emergency fund.
9. Winterize your home and begin to utilize energy conservation where applicable. For example, purchase energy-efficient light bulbs and ceiling fans, limit the number of holiday lights or switch to LED light bulbs instead, and unplug appliances when not in use. Shut down the computer instead of keeping it in sleep mode, keep the thermostat low during the day and keep window blinds open to heat a room.
10. Reduce the number of take-out food orders. Buy groceries in bulk when on sale and select a day during the week when you can prepare and freeze meals for two weeks or more at a time.
Difficult times call for difficult measures. We all need to make sacrifices to ensure we have enough savings for any financial scenario.
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