The credit crisis seems to reach new levels every day. There are more foreclosures, house prices drop even lower and we can't get loans for new purchases. The crisis has come about because numerous mistakes have been made. The government didn't set up necessary legislation, financial institutions were greedy and borrowers didn't consider whether they could afford the debts they borrowed. So, when we look back, what can we as individuals learn for the future?
The Credit Crisis - What Has it Taught Us?
By [http://ezinearticles.com/?expert=Brian_Ullitz]Brian Ullitz
The credit crisis seems to reach new levels every day. There are more foreclosures, house prices drop even lower and we can't get loans for new purchases. The crisis has come about because numerous mistakes have been made. The government didn't set up necessary legislation, financial institutions were greedy and borrowers didn't consider whether they could afford the debts they borrowed. So, when we look back, what can we as individuals learn for the future?
We need to have order in our own house first. I am a big believer in personal responsibility. We can complain all we want about the incompetence of the politicians and the greed of Wall Street. But first we need to take a look at our own behavior and see if we have acted as we should have. I have made this list of some major lessons we as individuals should consider.
1. Know your mortgage. Many people have not been considering whether they could afford their mortgage to pay for their house. I think a lot of people were persuaded into a mortgage they could neither pay nor understand. We need to know what we are buying, especially if we are buying something as expensive as a house. Just because the nice man in the bank wants to lend us the money, doesn't mean we can afford it. I recommend looking at a plain mortgage. Can you afford to pay a 20-year loan at a fixed interest rate and repayments on the principal right away? If so, you can afford to buy the house. If not, it doesn't matter how fancy a loan the financial industry can come up with, you basically still can't afford it.
2. Live within your means. Both society as a whole and many people are not living within their means. If you keep getting credit, you will undermine your future financial position. Of course, you can get to a temporary tight spot or you can need loans to invest in a house. But using your credit card to buy everyday goods is not very advisable.
3. Be critical of advice. Taking advice from the people who want to lend us money, or for that matter sell us anything else, creates a potential conflict of interest. They are interested in selling as much as possible and you are interested in paying as little as possible. So be very critical of their advice and verify their claims from a second source that has no vested interests. If you don't know anything about it, I think it is wise to consult an independent adviser before signing a house deal. It might cost a little, but it can save you a lot down the road.
4. Prepare for the bad times. The economy moves in cycles. Some years are good; some are not so good. Yes, this is even worse than the normal downturn, but we will make it through nevertheless. What you have to remember is to prepare yourself for the downturns, during the good times. This means making a cash reserve, investing in your retirement and generally living within your means.
5. Involve yourself in society. Although the market is generally taking care of many things efficiently, we can't let it work without any supervision. Some people's greed can destroy it for everybody if we don't keep an eye on them. There needs to be some legislation. History shows us every society needs some common playing rules to make it work in everybody's best interest. So be involved in making sure both political and business leaders act in the common best interest.
Of course, many more lessons can be drawn, depending on your personal conditions. There are also many more lessons for both Washington and Wall Street. But I believe these are the most important ones for us as individuals.
Brian Ullitz has written the e-book "Enjoy Healthy Personal Finances". He is educated at Copenhagen Business School in Denmark and has worked with finances since 1999. He is now the driving force behind the personal finance site http://finance4everyone.org/
He enjoys talking about finances and loves to help people improve their financial knowledge. It is his firm belief that everyone can experience prosperity. This includes you too. All it takes is the knowledge of how you can do it better and action to implement this knowledge in your life.
Article Source: http://EzineArticles.com/?expert=Brian_Ullitz http://EzineArticles.com/?The-Credit-Crisis---What-Has-it-Taught-Us?&id=1562376
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Saturday, October 11, 2008
Save Time on Your Finances
How do you feel about balancing your cheque book? The chances are you are like most of us and don't enjoy doing it at all. But of course it's a necessary evil in life, and if you don't take the time to keep track of where you stand with your finances then it becomes easier to spend more than you actually have.
Save Time on Your Finances
By [http://ezinearticles.com/?expert=Paul_Mcindoe]Paul Mcindoe
How do you feel about balancing your cheque book? The chances are you are like most of us and don't enjoy doing it at all. But of course it's a necessary evil in life, and if you don't take the time to keep track of where you stand with your finances then it becomes easier to spend more than you actually have.
It's a horrifying thought, but that is unfortunately how a lot of people end up getting into debt. It takes time and concentration to balance your accounts, and because it isn't something that many of us like doing, it's easy to put it off until tomorrow. When tomorrow comes you have even more to catch up on, as a result debt increases and it becomes even more off putting in an attempt to correct the situation.
So what's the solution? First of all you should save time wherever you can by switching any payments that you currently handle by cheque to direct debit instead. It takes a little longer to organise initially, but once it's done you never have to worry about it again. Most companies will send you a bill for each billing cycle year that will tell you how much will be coming out of your account and when.
Now it may be that you have so many bills to pay that you feel overwhelmed by them all. If this is the case then tackle a few at a time. It can often be beneficial to set yourself personal targets such as promising yourself that you will switch just one each week over to direct debit until they are all taken care of.
However, if you bank online you will find the whole process even easier to do, since much of it can be done via your computer. Some people tackle the whole job in one session, and rarely use their cheque book from that point onwards! Furthermore, if you perform your own tax return then banking over the internet has another advantage in that you can access your account much more easily, which is a useful option to have should you need to retrieve any information required to complete your return.
Everyone has different relationships with money but it's clear that there are ways to make life easier for yourself. For example, the online services offered by some banks allow you to link all your accounts up together so you can see them all on the same screen when you are online. This means you can take money from your current account and move it to your savings in no more than a few seconds, and so reducing those visits to your nearest branch.
Saving time is an important aspect to save for any person, and [http://www.abbeyinternational.com/ibs_home.asp]internet banking helps you do just that. Therefore, pick a time when you can get set up properly for starters, and once you're up and running you'll be amazed at the time you'll save.
Paul McIndoe writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
Article Source: http://EzineArticles.com/?expert=Paul_Mcindoe http://EzineArticles.com/?Save-Time-on-Your-Finances&id=1568777
Save Time on Your Finances
By [http://ezinearticles.com/?expert=Paul_Mcindoe]Paul Mcindoe
How do you feel about balancing your cheque book? The chances are you are like most of us and don't enjoy doing it at all. But of course it's a necessary evil in life, and if you don't take the time to keep track of where you stand with your finances then it becomes easier to spend more than you actually have.
It's a horrifying thought, but that is unfortunately how a lot of people end up getting into debt. It takes time and concentration to balance your accounts, and because it isn't something that many of us like doing, it's easy to put it off until tomorrow. When tomorrow comes you have even more to catch up on, as a result debt increases and it becomes even more off putting in an attempt to correct the situation.
So what's the solution? First of all you should save time wherever you can by switching any payments that you currently handle by cheque to direct debit instead. It takes a little longer to organise initially, but once it's done you never have to worry about it again. Most companies will send you a bill for each billing cycle year that will tell you how much will be coming out of your account and when.
Now it may be that you have so many bills to pay that you feel overwhelmed by them all. If this is the case then tackle a few at a time. It can often be beneficial to set yourself personal targets such as promising yourself that you will switch just one each week over to direct debit until they are all taken care of.
However, if you bank online you will find the whole process even easier to do, since much of it can be done via your computer. Some people tackle the whole job in one session, and rarely use their cheque book from that point onwards! Furthermore, if you perform your own tax return then banking over the internet has another advantage in that you can access your account much more easily, which is a useful option to have should you need to retrieve any information required to complete your return.
Everyone has different relationships with money but it's clear that there are ways to make life easier for yourself. For example, the online services offered by some banks allow you to link all your accounts up together so you can see them all on the same screen when you are online. This means you can take money from your current account and move it to your savings in no more than a few seconds, and so reducing those visits to your nearest branch.
Saving time is an important aspect to save for any person, and [http://www.abbeyinternational.com/ibs_home.asp]internet banking helps you do just that. Therefore, pick a time when you can get set up properly for starters, and once you're up and running you'll be amazed at the time you'll save.
Paul McIndoe writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
Article Source: http://EzineArticles.com/?expert=Paul_Mcindoe http://EzineArticles.com/?Save-Time-on-Your-Finances&id=1568777
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