HOW TO SURVIVE THE CREDIT CRISIS

What are the strategies that people need to employ in order to survive these trying times? Here are some strategies that you can follow on how to survive this economic crisis.

FOR NO REASON SHOULD YOU BUY WHAT YOU CANNOT AFFORD!

We all feel the need to keep up with the Joneses (instead of dragging them to our own level), We all want to look good, wear designer clothes, shoes, bags, perfumes, watch (and god forbid), drive a Ferrari. There is a very simple solution to this problem, if you cannot afford to buy luxury items, don’t buy it! Period. This is perhaps one of the most difficult strategies to implement because you just have to show that “Snobby Von-Richer than thou” in your office that you can afford to wear designer stuff too (when you know perfectly well that you can’t afford it). Many of us go to the store to buy one or two items but end up leaving the store with several shopping bags filled with lots of goodies, we do this because we are not disciplined enough to resist those goodies staring us in the face and our credit companies also give us the OK.

THINK OF HOW MUCH YOU WILL SAVE

Think about it, when you pay interest on a purchase, you will end up overpaying for that item just because you get to use the item now. The amount you pay is far greater than the actual cost of the item (that is the logic behind buying stuff with the promise of paying interest). In order words, you are actually giving away your hard-earned cash in order to purchase an item that is way costlier than its actual value. Paying interest only puts more money in someone else’s pockets.

DON’T FOLLOW THE “CREDIT CRAZY” CROWD

Everybody knows that amassing debt no longer carries any form of social stigma whatsoever because everyone has some sort of payment ranging from car payments to house payments and oh! Let’s not forget, credit card payments. If you cannot pay cash for an item, it simply means you can’t afford it. Do not follow the “credit crazy” crowd, just because everyone is credit buying does not mean you should join them. Buying something you simply cannot afford now, can double the price of paying back later. For instance, if you buy a house that is worth about $400,000 today and the real estate value suddenly slumps and this development reduces the value of your home by $200,000, which means you will be paying the bank twice what the house is now worth (that is outrageous!).

STOP SPENDING MONEY IF YOU ARE IN DEBT!

Getting deeper into debt will NEVER help your financial situation. Simply draw up a “realistic” budget in order to cut costs on unnecessary purchases. If you are not sure on how to go about this, read books or listen to materials that will teach you the beauty of living on a budget.