And right about now, we could use a super hero to get us out this mess….or heck, we need the Justice League at this point. Yikes, yikes, yikes….it seems that not only is the U.S. economy dealing with a crisis, but the rest of the world is also being affected by our financial situation. I keep hearing phrases that cause me to stop and pause, such as “American Financial Crisis” and “Economic Meltdown”. Recently I heard a phrase that stopped me in my tracks…“the worst financial crisis since the Great Depression”.
Is this crisis really being compared to the Great Depression? I was told by many elders that something like the Great Depression would not happen again since “we learned from that experience”. I gotta wonder now….did we learn enough?
I realized that one thing that helps me to feel better about my financial situation, during this crisis, is to verify my income versus my expenses. That is something that I personally can do now and that helps to give me an indication of how I am doing financially, which brings a sense of confidence and assurance.
If you are finding yourself worried about the current economic crisis, and your own financial situation, please take the time to do this simple but effective exercise. Just sit down and re-evaluate your monthly income versus your monthly expenses. List everything, including small purchases, like coffee in the morning at Starbuck’s, or a donut from Dunkin’ Donuts. Better yet, take a day or week and keep track of every purchase you make. Then you will be able to tangibly see where your money is being spent. If you find that your expenses total more then your income, then you will need to analyze each expense and see where you can make some significant changes.
The great thing about this little exercise is that if most people do make sure their income is more then their expenses, then we all will help the recovery of the financial crisis we are seeing happening around the world today. So sit right down and make sure your personal situation is “in the black” (i.e. financially stable) and steering clear of “the red” (i.e. in debt).
Financial Peace to All!
Is this crisis really being compared to the Great Depression? I was told by many elders that something like the Great Depression would not happen again since “we learned from that experience”. I gotta wonder now….did we learn enough?
I realized that one thing that helps me to feel better about my financial situation, during this crisis, is to verify my income versus my expenses. That is something that I personally can do now and that helps to give me an indication of how I am doing financially, which brings a sense of confidence and assurance.
If you are finding yourself worried about the current economic crisis, and your own financial situation, please take the time to do this simple but effective exercise. Just sit down and re-evaluate your monthly income versus your monthly expenses. List everything, including small purchases, like coffee in the morning at Starbuck’s, or a donut from Dunkin’ Donuts. Better yet, take a day or week and keep track of every purchase you make. Then you will be able to tangibly see where your money is being spent. If you find that your expenses total more then your income, then you will need to analyze each expense and see where you can make some significant changes.
The great thing about this little exercise is that if most people do make sure their income is more then their expenses, then we all will help the recovery of the financial crisis we are seeing happening around the world today. So sit right down and make sure your personal situation is “in the black” (i.e. financially stable) and steering clear of “the red” (i.e. in debt).
Financial Peace to All!
2 comments:
Hi Shannon,
I agree with your idea of examining our current income to expense ratio. Makes you breath easier knowing the truth.
I also advise my clients to do a worst case exercise. I wrote about advising one of my Wall Street clients in this exercise on my blog recently. I have found it to be very valuable.
Here's the link:
http://matthewferry.com/blog/?p=34
Matthew
It is true. We got lax and thought credit could fix anything. Because our houses were worth so much we could always get the money we didn't have to buy stuff. Well, we truly found out how fragile the credit world is. We definitely need some inner reflection on those purchases we don't truly need.
Post a Comment