Survival Guide for a Plunging Economy
The forecasts for the 2008 USA economy aren’t looking good. In effect, the rest of the world would have to take the blow too. It might not be apparent for those already in the US but a depreciation of the US dollar would mean appreciation of local currencies in many other countries. While appreciating currencies would mean a better economy at face value; that is usually not the case. When a country’s economy becomes better, the effects would be felt around two to three years later. Which means while the local currency becomes devalued; the prices in the market remain the same for another two to three years. So, even if it’s just the US which would have an economic turbulence next year, many countries will also experience the same problem. How does one survive on a plunging economy?
1. Invest Your Money Now
I remember when we had built our family business. The dollar had such a high value during those times. It’s a good thing we went through with it because two years later, what we have bought from what we had couldn’t be bought with the same amount today.
2. Keep Emergency Funds
Even if you invest your money, you should ALWAYS have cash on hand or in the bank. You will never know when you’ll need the money or if your investment pays off. In short, don’t spend everything you have. Your investment should only be an asset which could be liquidated at a latter time.
3. Be Frugal and Save Up
Saving up might make the difference between starvation and opulent living even in the midst of a financial crisis. Tighten your belt. Don’t eat out unless you don’t have a choice. Don’t go on shopping sprees. Limit credit card spending.
4. Pay off Your Debts Now if You Can
If you have debts due next year, pay now if you can. With no debts to worry about next year, it might be smoother than what we all imagine.
Filed under: personal finance
