The credit crunch is continuing to beat thousands of people out of their homes - people who once lived the American dream. They worked hard for their dream and thanks to a volatile situation with several areas of blame, many of them are now homeless without money to spare.
Living without money and struggling to pay bills sucks big time. It is not only devastating for those who have to live with this situation, but it also destroys families and lives in the process.
But are there ways you can actually help yourselves, and if yes, what can you do to protect yourself against losing a home or running out of money?
These are hard questions because none of us can see into the future. Nevertheless, they are part of our lives now, whether we like it or not, and as we watch the shocking reality of the credit crunch unfold on the world stage it is high time we all found ways to protect ourselves from being the next victim.
- Cut impulsive spending
In times when money is short, it is more important than ever to stop impulsive spending immediately. Even if you just save $20/week by not having a cup of coffee around the corner every morning it can add up (the latte effect). Instead you could pay this excess money on to your mortgage to bring down the interest payments which will further save you dollars.
- Look for a second income
Many job earners are in a situation when they don't know whether they still have a job tomorrow. Think real estate, the banking sector, local small businesses. Many of these are especially endangered due to a slow economy. Most people have no excess money to spend anymore and this creates a massive chain reaction with many businesses going bust.
If you work in a high risk industry, act now and look for alternative income streams. It may mean working two jobs or doing some freelancing on the side, and regardless, it will mean more time on the job than off. Even if this means you will be uncomfortable for some time, you rather be that than broke and without a home.
- Cut up your credit card
If you find it hard to deal with credit and feel that you cannot pay off your credit card bills in full every month, you are better off without credit cards. The problem with these is that we don't think before we buy because we don't have to hold physical money in our hands before we spend it.
It takes re-education and new habits for you to become a more responsible shopper.
- Consolidate your loans
I hesitate to offer this tip but if you really do your homework and create a clear plan that will reduce your overall spending habits, consolidating may be a decent option. Be sure to watch everything from the term of the loan to the interest rate and penalties. Many times this will reduce your monthly payments so you have a better cash position each month allowing you to apply money to other, more important things, like food and clothes.
- Think twice before you buy stuff
Do you really need that fancy new hand bag you saw in the window of your local boutique the other day? How about those new CD's you desperately want? Sometimes it is better to sleep on the decision whether to buy something or not.
Instead of wasting your money on stuff that will only end up cluttering your home, be smarter and look for alternative ways to satisfy those shopping cravings. Perhaps you are upset and need a little pick me up to make you happy. When we associate feelings of excitement and happiness with shopping for new things we can quickly fall into a dangerous and expensive pit of self destruction.
Recycling doesn't limit itself to glass bottles and tins. You can also recycle clothing, household items, clutter, Cd's, electrical gear and more. One man's rubbish is another man's treasure. Before you throw these unwanted goods into the bin, sell them in a garage sale or on ebay to make some additional money.
- Offer your services to friends and family
A great way to raise additional funds when times are tight is to offer paid services to friends and family. If you have a talent with the needle, why not offer to do alterations for people. Alternatively, if you are good with money you can offer to do tax returns for a small fee. The idea here is to think outside the box to find ways in which you can earn additional income without having to bust your guts finding them.
Think about everyday things people need, even if the economy is slow. Can you cash in on those needs?
- Find 101 ways to save money
A great way to scrunch those numbers is to make an effort to save money wherever you can. Doing so will allow you to enjoy life more where it really matters, like spending a great weekend with your family in an adventure park or going for a weekend getaway.
Maybe you would like to share your favorite tips on saving money and how you protect yourself against the global credit crunch problem?