It’s been a busy week with Merill Lynch, WaMu, AIG, and Lehman Brothers in a mess. Even today here are talking about the total costing taxpayers $1 trillion dollars. Is it time to panic? No. It is time to get be serious about your finance, though.
Now is always a good time to start getting your plans together and take steps to improve your situation. I noticed some others have commented on how they’re faring and I decided to share our situation.
What’s Our Take on the Economic Mess?
Our plans are pretty much the same even with this financial mess stirring around. Get Rich Slowly offered this advice and we’re on the same page. I’ll add my take with the his advice.
- Don’t panic. Are these bad times financially? Yes, but it can be handled with a clear head and a plan .
- Tune out the media. I’ve had to turn off the TV because every 5 minutes in a newscast there seems to be an air of panic. I prefer online or the paper to get news. It’s easier to pick up and put it down. Many stations offers news of doom, but very little offer some practical solutions.
- Remember your goals. Reevaluate your financial goals. If you can’t pay down debt as aggressively as you want due to economic hardships, then pay down as much as you can.
- Focus on the fundamentals. Pay yourself first, have an emergency fund up, reduce you credit card debt, increase the positive difference between income and expenses, and set aside some money for others.
- Know your risk tolerance. You can get stocks, funds, and index funds at a lower price than before and save for a retirement in the future. Just don’t get ahead of yourself and buy whatever you see.
- Educate yourself. The more you know the less panicked you’ll be.
Ramit also has a three-minute video with tips for today’s economy that is pretty helpful.
In case you’re wondering what our financial goals are and how we use our joint accounts, we’ll share some.
Our Current Financial Goals:
- Getting out of debt from a car and student loan
- Invest for retirement
- Build our savings
- Find a home to own within our budget
How we organize our joint finances:
- ING Checking: This is the account where we pay our ‘joint’ bills like rent, groceries, light, Internet, etc. We prefer this account as it has no minimum balances, no fees, and it earns interest. We have a buffer built in just in case something crazy comes up.
- ING Savings: This is our emergency fund/housing fund account. We like to keep the money together in the bank and then we ‘separate’ it on a spreadsheet. I like to see a larger number, as it gives me motivation to make it grow.
We’re fine with where our money is and don’t have plan to change it. Our joint and individual banks are FDIC insured. Since our balance is less than $100,000, it’s covered.
I did close an individual savings account since it was redundant and I was earning higher interest at another bank.
Renewing Our Rental Lease
Tomorrow my husband and I are renewing the lease on our apartment. The good news is our rent will decrease around $25 each month for a yearly savings of $300. It’s a small amount, but if we can reduce our expenses, I’m happy.
What about you? Are you making any changes to your plans? Are you able to survive and maybe thrive through this financial mess?
Photo Credit: Refracted Moments™