Dealing with an Economic Crisis

The money crunch is taking its toll on even those with secure employment and seemingly endless disposable income. Prices are still increasing despite a rising unemployment rate and an increase of people seeking help from programs such as Medicaid and food stamps. Despite assistance from these programs the pain of the crunch is still felt perhaps more than ever in these homes. So how do you deal with the current financial crisis without worrying yourself to death?

Bartering is beginning to come back. Even though gas prices are lower than they were a few months ago those with larger lawns to mow are finding it's still a bit expensive due to a decrease in wages. Someone with a rather large space to clear out can check with a neighbor that has horses. In exchange for allowing them to fence the horses up on their property which will clear the area for them free of charge they will perform a few repair tasks for the owner of the property. This saves the landowner much needed money that would be spent on gasoline and maintenance while reducing the horse owners feed cost allowing them to keep the animals they might otherwise have had to sell.

This is just one way to exchange items to save you and your neighbors' money. Planting a community garden and splitting the cost of seeds and the labor will help to ensure that each of you has the food that you need to survive. The cost of the garden will be less than your average trip to the grocery store for vegetables and it'll be cut in half when you split the cost with a friend.

Trading items and splitting costs can extend to furniture and clothing. Then there are the monthly expenses that you have no choice but to pay each month. Or do you have a choice? Those that are still enjoying two incomes for the time being should begin to prepare for the possibility of losing one of those incomes by reducing the amount of the monthly bills so that they are covered by only one income. A thorough examination will show where expenses can be cut.

Do you have luxuries that you are paying for each month? Can you determine which expenses are luxuries readily? As you examine the bills you should make a determination of what you can live without. The cable and those magazine subscriptions might be nice but chances are you'll survive without them for a while as you build your savings. The light bill is often one of the largest bills we pay examining the way electricity is utilized in the home can reduce this expense by up to 50% each month when you're diligent in your efforts.

Once you have the bills covered by one income it is time to examine your daily spending habits so that you can place that income into savings in its entirety each month. When you place one income into savings each month you are helping to ensure that you have at least six months of emergency build paying income saved in the event that you find yourself with one or no incomes in the future.

Are you recycling? Something as simple as saving aluminum cans for recycling can generate extra income that you can place into savings. Everything that you manage to save and recycle for cash helps your wallet while helping the environment. You have already paid for the item itself when it's empty or worn out the money you get from recycling it should go immediately into savings.

Now isn't the time to begin replacing everything in the home regardless of its age. It's time to make the most of what you have. While sales ads arrive daily to temp you into new purchases resisting them as you pay on your outstanding debt and build savings is that best thing you can do. Paying just the minimum on credit card balances until you have six months of emergency funds built up will reduce spending. Checking to see if you can renegotiate the mortgage to a lower monthly payment will help keep you in your home.

Once you've examined expenses and cut as many as you think you can it's time to do a budget. Checking this finalized version will help you to find even more areas where you can cut expenses. Taking a small notebook with your each day and writing down your purchases will help you to understand what you're spending your money on. Knowing what you're spending money on will help you to deal with the pain of the financial crisis.

Examining alternatives to the traditional entertainment such as movies and checking them out at the library when you get books will save you a great deal over the course of the month. Eating at home as a family instead of going out to eat can save you a small fortune. Surviving the money crunch is all about being prepared to sacrifice a little today to have a more secure tomorrow.