How to Avoid Economic Meltdown
Simple Ways to Get Control of Personal Indebtedness
Over-spending is an American pastime. Bankruptcy filings are at an all time high. Foreclosures are rampant; repossessions have never been higher. The government seems to be bailing everyone out but the taxpayer. So, what’s a person to do when personal financial disaster threatens?
Reasons for Financial Stress
First, statistics show that most people are not surprised when a financial crisis arises. Indeed, often people know why it will occur, just not exactly when. In reality, most financial difficulties are due to self-indulgence. People overspend. Even though everyone knows that a savings account is critical for survival, most individuals live paycheck to paycheck, thus living only 30 days from disaster. But it is usually not one bad decision that leads to financial meltdown; it is often several bad decisions, each compounding the next.
There are a plethora of books written by highly successful people who offer well-researched advice on how to avoid financial catastrophe, from Suze Orman’s The 9 Steps to Financial Freedom to Joe Dominguez and Vicki Robin’s Your Money or Your Life, to Thomas J. Stanley’s The Millionaire Next Door. The internet is host to millions of articles, many written by professionals, giving financial guidance and advice. The point is, the vast majority of people have no logical reason for continuously overspending.
Self-Discipline and Cutbacks
Should a financial upheaval threaten, however, there are things that can be done that can help you, over time, extricate yourself from your situation.
Self-discipline is paramount. Go through the stack of bills and prioritize them. Realize that you must pay something on everything, so prepare to plug away on them. Make and keep a budget. Do not use credit cards for any reason. Pay cash for everything. (Doing this will make you much more aware of what you’re truly spending and tends to slow spending down considerably.) There are a plethora of other ideas to consider.
How much one must give up depends entirely on how much debt one has incurred. There are times, sadly, when one simply might need to let things go, like a timeshare, an expensive new purchase, or a cherished activity that costs too much to continue. Vacations may need to be postponed. The old computer can probably last another year. So can the car and/or bike.
Humor Helps in Tough Times
This is the time when self-discipline is mandatory. Unfortunately, self-discipline is a characteristic that many self-indulgent people lack. To tackle this dilemma, try approaching these cutbacks from a creative/fun/challenge perspective. Making this a game and employing some humor will help things go easier than you may have anticipated.
New Year Resolution
Resolve to go into the New Year with a goal to eradicate all of your extraneous debt. With some self-discipline and determination, you can avoid financial meltdown.
Vacations May Need to be Postponed or Cancelled
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