Watch Your Bank Account, Not the Headlines
As usual, reading the financial headlines today made my head spin.
On the one hand, it was just announced that the economy shrunk at a much slower rate than expected this last quarter - only 0.7 percent compared to the 6.4 percent drop during the first three months of the year. According to the Associated Press, this supports the belief that the economy is actually growing. That's good news. But wait - according to this story in the Chicago Tribune, consumer confidence plummeted unexpectedly due to job security concerns. It looks like retail will probably be down this holiday season, hurting recovery. Hmmm, not so good news.
Up, down, up, down - it's hard to know what to believe or how to feel about the economy. At times like this, I tune out and worry about the one thing I can control - my personal finances.
Now, I'm not denying that the recession is real or that the economy has an effect on our bank accounts. Hey, I've been feeling the pinch, too. But sometimes I think the recession is a scapegoat for problems we would have had anyway - which is actually good news.
If you're like most folks, you were probably relying heavily on credit before the economy took a nosedive. And if - like most folks - you were paying the minimum on your credit card bills, your bills would have gotten bigger and bigger, regardless of the economic state. Sure, maybe you'd be making a bit more money now if times were less tough. Maybe your house would be worth a bit (or a lot) more. But you'd still be trying to juggle a mortgage payment, groceries, gas, medical bills and other everyday realities with growing debt payments.
Rather than view this reality as hopeless, I like to view it as a wake-up call. It doesn't matter what the economy does. What matters is how you handle it.
Stop spending more than you earn. Try to cut back on credit and, in doing so, interest. After all, why would you still want to be paying for today's purchases 10 years from now? Save just a little bit each month to put towards your debt. Reducing interest will pay off big-time in the long run. If your budget is too tight to budge, find a way to loosen it up. Bankruptcy is a time-tested way to pay your debts in affordable increments while also gaining the benefit of legal protection (under the U.S. Constitution, thank you very much).
If you want to find out more about bankruptcy, you can do it for free. Just give our complimentary personal debt analysis a try. It's a one-on-one session with a Chicago bankruptcy lawyer. The headlines will always be up and down, but - with the right debt relief plan - you can stabilize your own finances for good.