February 15, 2010 by akhilendra
Tackling a financial crackdown
Recession is almost over now, recovery is on the tracks. There are still sometime in coming back to normal and probably quite a few hiccups to survive but, worst is over. We should let this recession go without doing a self analysis. Corporate have done it, they have come up with ways of cutting down their operating cost and extracting profit from the average business scenarios. Last year, many of us saw job loss and cuts in salary. Most of us found it hard to survive with no or less salaries. It exposes lapses in our financials. We need to look into our own practices of money management. Today, we feel a increased sense of job insecurity and with the growing size of economies and market, there won’t be a big deal, if we have to face one more recession or recession type downturn in next few decades, again.
We should not take things as granted and when it comes to money, we have to follow this rule very strictly. Those who didn’t follow that are now facing big financial problems. There were many individuals who were making good money but were spending it unwisely and didn’t save anything. There were guys who crossed their limits and went overspending which they later regretted. We need to make sure that under no circumstances, the monthly installment payments should never exceed 40 percent of our monthly salary. We need to take special care while planning for buying a house or a car. After housing industry went into the slump, crisis even aggravated. One must put things in perspective and figure out the priority of various financial obligations.
There are guys who went a bit extra from their paying potential to buy a big and expensive house and then suddenly got a pink slip in their hand. Situation was a disaster for them because they had no clue about it and came as a nightmare. The first step towards securing the financial stability should be taking control over the money outage. One must figure out fixed and flexible expenses. Fixed expenses like loan repayments or house rent should be monitored and bought down, if possible. It includes pre closing loans. Loans are the biggest cause of worry under uncertain financial conditions so one can attain sanity by closing them, provided individual can afford it. For flexible expenses, one needs to seriously think about it and try to cut down unnecessary expenses.
Medical treatment related expenses often comes as surprise and leave us bankrupt, as the cost of medical treatments has gone up significantly. Nowadays, it is not very difficult to get a health insurance policy, so it should be a big deal to manage it comfortably. One must put a particular fraction of earnings towards saving. There are various investment options available in the market. After going through them carefully and considering own financial goals, one should allocate the money accordingly. Investing in one form of instrument may not be such a good idea in current market conditions. Streamlining and controlling own financial can give us priceless peace of mind, which is very important to live a comfortable life.
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