Here are some twists that will help everyone not only survive but also thrive during the economic downturn, no matter what happens to jobs or the money markets.
Save More Money
Pay off less on credit cards and save more, according to Suze Orman, a personal finance expert. This is contrary to Orman's usual advice that the first thing people do is pay off their credit cards. In normal circumstances, when people are feeling secure in their jobs, it is better to pay off credit cards first because the interest most people pay is much higher than what they would earn if they saved the money instead.
However, according to Orman, the problem with this strategy now is that if someone loses his or her job and has paid down their credit card but has little or no savings, the credit card company will likely close the card or at least reduce the limit, and the person will have no savings and no way to pay the bills until he or she gets another job. By reducing credit card payments and saving the money instead, people can start to build up an emergency fund in case they lose their job
Live on Less Money
Families should also try living on half of the money they usually have, but if this isn't possible, at least try living on less than usual. That way in the event of a job loss, according to Orman, they are used to getting by on less and the transition between jobs will be less of a shock. Plus, by doing this and saving the remaining money, they can increase that previously mentioned emergency fund that is so crucial right now.
Call the Creditors
When people are having trouble paying their bills, the first thing they should do is call the creditors, whether it's a credit card or utility company. If they've always paid their bills in full and on time, the companies might reverse late fees and extra interest. If money troubles drag on, arranging payments, even if they're late, keeps the company from referring the account to a collection agency.
Donate to Charity
This may sound contradictory because it's not possible to earn more money by simply giving it away. But donating to charity sends a message that says “I have enough” and “I can afford to help other people.”
Be Grateful
In the same vein as the previous tip, if people are grateful for what they have, it can bring more to them than whining about what they don't have. According to Orman, the emotion of gratitude, whether it comes through prayer, meditation or some other method, not only makes people happier right now but also leaves them open to receiving more.
By saving more, living on less, donating to charity and being grateful, people can not only increase their savings during tough economic times but also improve their quality of life and increase their happiness now and in the future.
Source:
"Suze Orman's Recession Rescue Plan" at www.oprah.com
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