As 2008 draws to a close, many are fearful of what next year holds in store for us. As an observer of the recent financial crisis, I am optimistic that many of us are beginning to awaken to the poor financial decisions that got us here in the first place. As we gradually feel the hangman’s noose of our financial creditors tighten, we've started replacing ill conceived spending habits with prudent ones. This past summers grossly inflated gas prices provided an additional wake up call, as we were forced to begin making choices on how best to spend our finite incomes.
It might come as a surprise to learn that not everyone is panicked by this recession in which we find ourselves. Folk’s recessions are going to happen, so you might as well get used to them. The economy is cyclical. It expands and contracts in a constant battle to find a balance between supply and demand. Right now we are in a period of contraction. A period for which a select few have prepared. So, what does one do to prepare? You live within your means and save for a rainy day.
"Living within your means", means to stop spending money you don't have. Aside from buying a house, if you can't pay cash, you can't afford the item. If you want, or need the item, save up your money and buy it! Stop playing the credit card shuffle and begin making plans for your money. Imagine your life without payments. No mortgage, car loan, credit card bills etc. It is possible! Make a New Years Resolution to stop borrowing, begin paying down debt, and prepare for the future. For more on budgeting, check out www.longrunfinancial.com and click on the "Financial Services" tab.
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