When our personal economy is more important than the US economy.
‘œYou might not always get what you want, but you always get what you expect.’ ‘“ Charles H. Spurgeon
It’s easy to get caught up in the bad news about the national economy but these days we should be paying more attention to our personal economy. What can we do to insulate ourselves from the current insecurity?
Mary Hunt of Everyday Cheapskate echoes this sentiment:
Unemployment figures only matter when it’s your job that goes bye-bye, and then the rate for you is 100 percent, regardless of what the Bureau of Labor Statistics is reporting. Rather than sitting and stewing about the national economy, turn your attention and your energy to assessing your personal economy.
She suggests that we ask ourselves three questions and offers advice with these answers:
- Do you have an emergency fund?
- Are you keeping up with inflation?
- Is your employment secure?
Think about it: what’s really more important to our personal financial situation? Is it the bigger picture or view from within our household?
When we hear the news that the US is in a recession’¦ or when our adjustable-rate mortgage resets and we can’t keep up with the payments?
When we read that Americans spent much less on gifts this season than they did last year’¦ or when our last credit card has been maxed out by paying for necessities like groceries and gasoline?
When the financial portals report that a recovery will be slow and likely begin in early 2010’¦ or when we wonder how we’re going to get by in 2009 when we’ve been laid off or find ourselves underemployed and not able to keep up with our monthly expenses.
Of course, it’s the second set of events that matter because that’s when it gets personal. A writer at Young Money asserts that we can correct our personal economy but first and foremost, we have to stop the debt cycle:
As your friends are driving their leased cars, wearing clothes paid for with borrowed money, and eating dinners they can’t really afford, you’ll realize that their entire lifestyle is rented, while yours is owned. When their lease is up (so to speak) they will be left with nothing. When the economy takes a downturn or their job gets downsized they will lose absolutely everything’”and all the pride that went along with it.
He suggests three ways to strengthen your personal economy:
- Expect the unexpected.
- Pay down your debt.
- Plan for your future.
Hillary Clinton surmised a year ago: ‘œHelp the individual, you boost the economy.’ But really the bottom line is that we need to help ourselves.
Need help? Here are some ideas to jumpstart your personal economic plan in 2009:
31 Days to Fix Your Finances at The Simple Dollar
Save $1,000 in 30 Days Challenge at I Will Teach You To Be Rich
Create Your Personal Bailout Plan at Lifehacker
How the 90% Rule Can Lead You to Happiness at Dumb Little Man
Or as The Digerati Life advises: We should act as if we are about to lose our job.
What about you? How are you protecting your personal economy during these tough economic times?
Photo credit: stock.xchng.
Hi Nina – great advice. We’re worried that my partner’s funding for grad school might get reduced next year, so we’re looking at ways to reduce our expenses. We are getting rid of one of our cars in January to eliminate the insurance and registration costs. We’re also cutting out cable and doing Netflix instead. And we’re shopping around for the cheapest place to fill our prescriptions. It’s not a big dent when you think of the day to day expenses, but it should save us about $1000 a year.
Serena: I’m curious how you decided to get rid of one of your cars… and of course, think this cost-saving step will make a good post. Martinique has been trying to get around without her car but she lives in a city with good public transportation and rides her bike to work. What about where you live?
Tucson has decent public transit and my partner can take the bus to get to school. His car is a piece of junk that is barely functioning, so he’ll be donating it to our local NPR affiliate in January. Without the insurance and registration fees, he’ll be saving $700 a year. We’ve been relying solely on my car since September, so the decision was pretty easy.