Everyday I wake up the economy seems to look worse and worse. I have been right on top of the slide since I was in the mortgage business for the last few years. Each day, it was like, what other bad news could possibly come out? The government tries to make things look better than they are by cutting interest rates, but even that has had little effect. It’s just a down time.
The question is what can you do to survive in a down economy? You can’t keep spending like you were two years ago, not with gas prices near $3/gallon. So, how do you adjust? Well, here are three ways to start:
1. Make a List of Your Expenses
Part of the reason I moved back home from my office is to cut down on expenses I don’t necessarily need. Expenses are anything that you pay for on a daily, weekly, monthly, quarterly, or yearly basis. Your home, your car, your bus tickets, your weekend extravaganza is all an expense. If it costs you money, it’s an expense. Make a list of all of your expenses for a week. Yes it can be scary, but try to list them all.
2. Trim Your Expenses
For the second part, I need you to review your expense list. Separate them into necessary, semi-necessary, and luxury. Try to see which ones fit into which category best. Food shopping is obviously necessary, though you can always be a bit more frugal. Sporting Event tickets on the weekend is obviously a luxury expense. The semi-necessary expense category is for anything that seems necessary, like gas for your car to get to work, but may be avoided. For instance, what if you had the chance to carpool? Then the gas is not necessary. It is only necessary if you can’t carpool or find a ride.
3. Make Smarter Purchases
The last step falls in with the first two. Each expense deemed necessary is still possible to trim. It is more important now more than ever to think twice before you make any purchases. Is it really worth it to buy that new pocket book? Or that new video game? Try to balance your purchases. Obviously, if you work hard, it is great to reward yourself once in a while. Just try not to do it every day.
These 3 steps are not groundbreaking. I’m sure you have heard it all before. This is just a reminder that times aren’t what they used to be. For people in their early 30s and younger (like me), we have never seen a bad economy, nevermind a recession, since we’ve been in control of our spending. These steps are always a good idea during any economic situation, but now they are vital. Those monthly bills are going to keep coming. It’s up to us to be prepared to handle them.
These 3 steps are just a start. The rest is up to us.
