The economy is getting a little scary: gas prices are high, the dollar is low, unemployment is rising, and the credit crunch isn't going anywhere soon. What can you do to prepare yourself for potential recession problems? Here are some quick and easy tips from our experts:
1. Check Your Credit - A good credit score will make it much easier for you to qualify for loans and credit cards in this tough financial market. Aim for a credit score above 750 to get the best deals. You can use our free Credit Score Compass tool to estimate how specific changes impact your score.
2. Pay Attention to Your Money - There are free online programs like Mint.com that make managing your finances painless. Charts that automatically track your spending can help you set goals and identify places to cut back.
3. Borrow Smart - Use the Internet to shop around for the best deals on credit cards and loans. Be sure you have a plan to repay the amount you borrow in a timely manner. Remember: You can't borrow yourself out of debt.
4. Trim Your Food Expenses - Food prices are on the rise, up 5% from last year already. You can save by shopping smart, cooking from scratch, switching from a morning take-out latte to a cup of home-brewed java, and bringing a brown bag lunch to work.
5. Check Your FDIC Coverage - If you have over $100,000 in a single bank account, you should spread it out between a couple of different accounts. You'll be protected by the FDIC in the event of bank failure as long as your individual balances are each below $100,000.
6. Carpool - If public transportation isn't possible in your area, see if you can commute to work with co-workers to lower your gas costs. Even carpooling one day a week can turn into big savings.
7. Tackle Your Debts - Carrying large credit card balances handicaps your finances and hurts your credit score. Now is a perfect time to work on becoming debt-free. Start with a free debt consultation.
8. Cut Energy Costs - You can save 7-10% on your cooling costs each time you move your AC thermostat up a degree. Boost your savings even more by switching to CFL light bulbs or energy efficient appliances.
9. Drop Your Cable TV - Get high definition TV stations over the air with an affordable antenna. Cutting off your cable translates into $30-$100 in savings per month.
10. Make Tough Decisions - Don't go into denial if you are facing foreclosure, bankruptcy, or other major financial challenges. The earlier you deal with the issue, the better off you'll be. Play hardball. Negotiate settlements and stand up for your rights.
What are your tips for managing the recession? Share them with our experts at tidbits@credit.com.
Quote of the Month
"If you can't pay for a thing, don't buy it. If you can't get paid for it, don't sell it. Do this, and you will have calm and drowsy nights, with all of the good business you have now and none of the bad."
- Benjamin Franklin |
