How to Survive the Credit Crisis

A Guide to Coping During the Current Difficult Economic Situation

Oct 13, 2008

The stock market appears to be out of control. Banks are failing, and people are worried about their houses, jobs, and personal finances. Here is a survival guide.

The present economic situation is difficult for everyone, whether home owners, savers, investors, workers, or the retired. No-one can be quite sure what will happen, but it is important to be realistic and form a plan to survive these trying times. Here are some suggestions.

Living within One’s Financial Means

In the last few years, many people have become used to buying whatever they want when they want it and living off credit if necessary. But now is the time to stop funding a luxurious lifestyle with debt. Everyone should make a plan to pay off all debts. Then they should try to save, even if it is only a small amount each week or month. Small savings can usually be made – on a daily coffee in a café, lunch bought out every day, one night out a week less, etc. In short, it is a good idea to have a cushion of savings, however small, in times like this.

Preparing Oneself for Recession

Most experts think that the world is in for a couple of years of economic pain and difficulty. The economy is unlikely to improve for a while, unemployment is likely to rise, and house prices will keep falling. People need to accept it and get used to it.

But this will not last forever. There have been recessions before, and they have always been followed by periods of economic growth. This time is not likely to be any different, but everyone needs to accept the situation and work out how to live with it rather than fighting it. Now may not be the best time to move house or make major expenditures…but that will be possible in a few years.

Spreading Savings

Most governments are now putting in place schemes to ensure that people’s savings in major banks will not be jeopardized if a bank goes under. Nevertheless, it is safer to spread savings over a number of different institutions. Better to be safe than sorry!

Making One’s Job Indispensible

All companies are trying to cut costs, and some employees will find themselves out of work. The loafers and thumb twiddlers will go first, so it important not to be one of those. Workers who are keen, and particularly those who volunteer or identify where they can add value to the company, will be in better positions.

Perhaps the most important thing is not to panic. Fretting will not change anything, and health should be everyone’s number one priority. There have been many stories of people suffering from stress and sleeplessness due to the current economic situation. It is important to relax, do something one enjoys, and spend time with family and friends. The credit crunch is not the end of the world as we know it!

Source

The copyright of the article How to Survive the Credit Crisis in Personal Budgeting/Finance is owned by Helen Krasner. Permission to republish How to Survive the Credit Crisis in print or online must be granted by the author in writing.