financial crisis

There is no denying that we are going through a very serious economic turmoil, the likes of which we have never seen in our lifetime.  The world and our society are experiencing significant changes that will certainly reshape many industries and this will undeniably trickle down and affect us in our daily life.  So I think it would be logical and smart to discuss how we can all cope with this crisis.  Here are some tips that can help you weather the financial storm:

1- Stay under control
Now is no time to panic.  Certainly, these are serious conditions, but freaking out and running around like a chicken without its head will do absolutely no good.  When faced with adversity, you must remain in complete control.  This is why it is crucial to remain calm.  Only under such circumstances can you make sound decisions and rationalize what is happening with logic.  Keep in mind that this crisis is affecting all of us.  We are all in the same boat, so there is no need to let things get out of hands.  We do not have much control over what happens in these financial markets, but we do have full control over ourselves, so this is what we should focus on controlling.  Great leadership is conveyed through calm and peace during difficult times, and what we need right now from everyone around us is good leadership.

2- Keep informed
It is extremely important to remain in the loop to know what is actually happening in these troubled markets.  If there was ever one topic that people definitely need to pay attention to, it is this one.  The more knowledgeable you are about this, the better decisions you can make.  I highly recommend that you get your news and information from various sources, as well as discussing it with your friends.  We need to share perspectives and opinions so that we can carve out the best possible plan for ourselves.  Also, try not to saturate yourself with too much news from the media.  It can be very easy to get discouraged when exposed to so much negativity.  While it is very important to stay informed, you do not want to overdo it to the point where you think this is the end of the world and can’t sleep at night anymore.

3- Reassess your financial situation
With the information that you have gathered, you need to start asking yourself some important questions.  Is my job or business affected by this?  For example, the auto industry is in shambles.  Do you or your company have links to this industry?  What about your investments?  Do you have alot invested in companies that are on the brink of a financial collapse?  This is why you need to stay informed, so that you can perhaps rearrange your investments into a more appropriate solution.  For example, gold is currently a skyrocketing investment.  Can you afford your mortgage even if the interest rates go up?  All these pertinent questions will raise your level of awareness and have you start thinking about serious & logical answers.

4- Have a back up plan
I am the type of person that always has a plan B, C, or D.  This has helped me achieve a great amount of success in my life.  The worst thing that can happen is to be slapped with a surprise event that forces us to change our path, but not knowing which path to now take.  This is why you absolutely need a back up plan.  What will you do if you lose your job?  You need an answer to this in case it happens.  What happens if your mortgage payments inflate significantly?  How do you react if the value of your investment portfolio is dwindling down at an alarming rate?  Having such a plan in place will not only save yourself many sleepless nights, but it can help save you some valuable time, energy, and probably money, simply by having had a rapid, yet smart answer to help you guide you into a new direction.

5- Change your spending habits
When there comes a time of recession or depression, you need to become extremely careful with money.  Spending on unnecessary items & keeping expensive habits will only put you in the hole deeper if you end up losing your job or your interest rates go up.  You have to be smart about how to go about this.  Being preemptive in case things get worse can make a huge difference in your life.  Instead of taking an extravagant vacation, perhaps a more economical one is the best way to go at this time.  Maybe go a little easier with the Christmas gifts this year.  Even if the oil prices are currently dropping, perhaps you can keep your driving habits that you changed to save you money when the prices were through the roof.  Anything that can help keep more money in your pocket is a good thing during these challenging times.  Now is not the time to rack up more debts, so living within your means is key to getting yourself through this crisis.

While it is a serious situation, it is not necessary to let this crisis take over your entire life.  Keep a positive attitude about this, continue to enjoy your life, and make plans for your future.  We will certainly get through this.  We will ride this wave and there will be much easier days ahead.  Just be ready.  Prepare yourself just in case.  It’s like wearing a seatbelt in your car.  You do not want nor expect to be in an accident, but just in case you are, at least you are protected.  Have this same attitude with your finances.  Put your financial seatbelt on, because the ride may indeed be quite rocky!

Published by admin5057

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6 Comments

  1. Building up your emergency (cash) funds is also a good idea in this environment. I would say you should have upto 12 monhts of zero-interest cash available to you if needed.

    Reply
  2. Building up your emergency (cash) funds is also a good idea in this environment. I would say you should have upto 12 monhts of zero-interest cash available to you if needed.

    Reply
  3. People that have lived a certain way for years, or have become conditioned to a certain lifestyle, have created strong neural pathways that reinforce their habits.

    People in this situation won’t change over night, or even in a week. There is a process that can produce true change, and help develop new habits.

    The first thing somebody must do is, as you mentioned, identify the essentials. Identify what is important in your life – what is needed and what is not. Set your goals and determine whether certain clutter in your life is helping you move closer to your goals or away from your goals.

    Next, create a vision board of images that represent your goals and dreams. Look at the board every single day, morning and night. Even create a presentation of these images on your IPOD, in a sideshow format. When viewing the images, think of the emotional feel (probably positive) connected with each image. If you have an image representing saving money, how would it make you feel if you saved as much as your goal?

    Your mind will remember these images and emotions attached to these images. Your brain is a device whose primary goal is to ensure survival. Survival doesn’t only refer to physical survival, as in eating so that you don’t starve.

    When you’ve ingrained goals deeply into your subconscious, not accomplishing them and experiencing the emotion you connected with them is a form of mental death. You are being deprived of whatever pleasure that you determined is a pleasure to you.

    Do you see how this is working?

    Reply
  4. People that have lived a certain way for years, or have become conditioned to a certain lifestyle, have created strong neural pathways that reinforce their habits.

    People in this situation won’t change over night, or even in a week. There is a process that can produce true change, and help develop new habits.

    The first thing somebody must do is, as you mentioned, identify the essentials. Identify what is important in your life – what is needed and what is not. Set your goals and determine whether certain clutter in your life is helping you move closer to your goals or away from your goals.

    Next, create a vision board of images that represent your goals and dreams. Look at the board every single day, morning and night. Even create a presentation of these images on your IPOD, in a sideshow format. When viewing the images, think of the emotional feel (probably positive) connected with each image. If you have an image representing saving money, how would it make you feel if you saved as much as your goal?

    Your mind will remember these images and emotions attached to these images. Your brain is a device whose primary goal is to ensure survival. Survival doesn’t only refer to physical survival, as in eating so that you don’t starve.

    When you’ve ingrained goals deeply into your subconscious, not accomplishing them and experiencing the emotion you connected with them is a form of mental death. You are being deprived of whatever pleasure that you determined is a pleasure to you.

    Do you see how this is working?

    Reply
  5. Great suggestions! Changing spending habits is big. Learning how to eat at home, or bring lunches is key. Also learning to be happy with what you already have. Getting new ‘stuff’ shouldn’t make you happy or define who you are.
    Backup plans are a good thing to have.

    Reply
  6. Great suggestions! Changing spending habits is big. Learning how to eat at home, or bring lunches is key. Also learning to be happy with what you already have. Getting new ‘stuff’ shouldn’t make you happy or define who you are.
    Backup plans are a good thing to have.

    Reply

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