Dollars & Sense
The last couple years have put a considerable strain on everyone, regardless of their social status. Since October 2008 the Wall Street Journal and other publications have lamented at the trillions of dollars lost by the sudden change in the stock and bond markets. While this is true in economic theory, the facts are quite different.
When you invest in your 401K or buy individual stocks, an assigned value is given to each share or unit you own in your portfolio. Prices in the markets change daily. Although fluctuations can be the norm, the truth is unless you trade out your shares, you have incurred no change to your original purchase. In normal times, your value would return and may even rise above your original purchase price within 9-12 months. However we are not in normal financial times.
The United States is witnessing events that have not been seen in over 80 years. The government has increased involvement in the banking and car manufacturing industries that has never occurred before this time period. GM has, and Chrysler is about to file for bankruptcy protection, with the government being the driving force behind the process. A government in dire need of bankruptcy protection itself is not the first choice of most people to take over manufacturing, banking or any free enterprise.
Financial experts predict the economy to begin turning around the last six months of 2009. Construction starts for housing and commercial projects will be extremely critical to making this prediction a fact. The current financial crisis impacts everyone differently and depending on the industry or area of the country you live in, the impact ranges from “dire” to “what crisis?”. If you find yourself in the former category here are some quick steps you can take to help you handle the situation.
Start by reviewing your annual and monthly expenses. If you don’t have a budget, create one today and be sure to include your spouse and children. In my household growing up, my mom ran the budget process and I would stack her up against any financial guru on how to stretch a buck and get the best buy on all purchases. The reason she could do that, there was no other choice or option. Credit cards were non-existent and all you had at your disposal was what the wage earner brought home. When you start your budget process, remember it is ok to say “no” or “not at this particular time.”
Develop a reasonable budget and stick to what you need to do during these times. If you slip one week, don’t panic. Look ahead and see what you can do over the next several weeks to get back on your plan. If you have a good week and spend all you thought you would, put half into a savings account and take the other half and treat the family (depending on the amount you may want to put all in savings). If you continue for several weeks being over or under budget, re-examine your original plan and either save the difference, or you may need to determine how to increase your income temporarily to cover any shortfall.
Most Importantly, pray and ask God for guidance on what you should do. If you are a Christian you should know that tithing is a part of your budget. If you’re not a Christian, tithing is a topic to be discussed at a later date. No matter where you are in your walk with God, He is always faithful and he will never put anyone in a situation they can’t handle. Prayer is the base foundation for every Chrisitian’s life and God answers prayer requests every minute of every day, we just have to be alert to his voice and respond to His will.