Now, I don't like the fact that our economy is hurting and the stock market is tumbling, but I see one positive out of this: People may take a closer look at their personal finances!
As individuals (and as a nation), we rely on credit too much. It has become so easy to get a credit card and then max it out. It was too easy to get a "good" mortgage a few years ago. The same goes for store credit, etc. Now, as a nation, we are suffering. So much of the income earned is going towards interest. As the interest keeps stacking up, it is becoming less and less possible to ever pay it off. So, people have less money to really use each and every day. The price of gas isn't what is killing the family income - it is debt!
So, what do you do? First, make it hard to use your credit cards unless you have been faithful in the last 6 months to them off every month. Second, before you buy something, determine how much it will really cost. In some of my classes, I have my students calculate amortization schedules so they can see how much of each payment is going towards principal (the item's actual value) and towards interest. This can be a huge eye opener. What you think cost $1000 may end up costing you $1200 or more after interest (that is with 12.5% interest for 3 years)!
What else can you do? If you currently have debt, pay it off as soon as possible! Paying $20 extra a month on a house can save you thousands of dollars in the long run! Maying one extra payment a year (i.e. paying half of the mortgage every two weeks) will take 10+ years off of the mortgage!
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