Sorry, no tips on how to survive a zombie credit disaster.
With news of S&P’s decision to downgrade our sovereign credit rating from AAA to AA+ (negative outlook), this can have serious implication for U.S. consumers. MSN Money – Smart Spending lists potential impacts of this credit downgrade such as higher interest rates on mortgages, car loans, credit cards and other consumer loans. Business probably will also have to pay more to borrow money, which isn’t helpful to the economy.
This news is certainly unsettling to most Americans. I’m a strong believer in not letting any crisis go to waste. Now would be a good time to review financial plans or start the process of creating a financial plan and budget.
First thing to keep in mind is to stay calm and focused on evidenced based information regarding your finances during this credit crisis.
With that in mind I turned to a resident expert who spent a lifetime managing finances, lives independently and is debt free; no mortgage payment, credit card debt or car loan. Who is this financial paragon? She prefers to go by the names “Mom or Gram”. She shared some tips with me about handling credit card debt or loans as she prefers to call them.
- Pay the full loan on time every month.
- If you have a rather large loan that cannot be paid off in one lump sum, always pay more than your minimum balance even if it is only three dollars.
- Another option is to pay the minimum balance plus the interest charged for the month.
The Bureau of Consumer Protection - Federal Trade Commission has posted timely information and tips on managing credit card debt.
There are basic question to ask yourself. Do you have a financial plan with defined goals? Do you have a budget that works within the structure of your financial plan? What is a budget? What is your credit score?
Financial planning is comprised of a set of goals you would like to obtain within a set timeframe. Included in the plan should be short, mid and long term plans designed to achieve your future goals. The University of Conneticut put together a helpful guide to personal finance for its students. The guide contains useful information for anyone seeking to learn ways to improve or stabilize their financial picture. Mint.com is an online personal finance organizer that pulls together your financial picture, allows users to set a financial goals and track their progress toward this goal.
A budget a way to manage a limited resouce – money. Everyone needs a way to make the best use of this resource. A budget will assist in tracking your income and outflow giving you information to make better choices with your finances. A collection of 10 free budget worksheets can be found HERE .
Checklists are a fantastic way to help you maintain your financial responsibility. Remember Captain Sullenberger used one during his fateful flight.
The debt incured by this administration undoubtedly will be passed on to our children. If you have school age children, inquire with the school district if there are financial literacy courses are available. Listed below are a few links that contain information for parents and educators:
Now is the time to ignore the media driven hype and objectively evaluate strength and weaknesses in your financial health. In the end, my hope is that this credit crisis will set America on the path of becoming a saving nation, not a spending nation.
FYI: The blogosphere is filled with financial blogs created by people finding their way out of debt and sharing lessons learned along their journey.
If you have any financial tips you would like to share, leave a message in the comment section.