President Obama, Congress, the Federal Reserve and the Department of the Treasury are all working hard to create and implement a economic stimulus package that will get our economy moving again. You don’t have to wait for them to get your house in order. Read this article to see how you can get started reviving the economy today.
Now don’t worry, you won’t need a degree in economics to bring about real change to your household. Little changes can go a long way and every little bit helps, so let’s get started. I will use an analogy associated with common first aid. When a first responder comes upon a victim they will take four life saving steps to save the patient. Those four steps are stop the bleeding, restore the breathing, protect the wound and treat for shock.
The first step is to stop the bleeding by getting control of your budget. Record every expenditure for a month, and I mean every expenditure from the mortgage to a pack of gum. Once you have a clear picture of where your money is going you can more easily determine where to stop future money from going. Stop bleeding money on frivolous things and instead focus your spending for maximum debt reduction.
The next life saving step is to restore the breathing. Since you have stopped bleeding money and are focused on reducing debt you will begin to create some breathing room in your budget. This breathing room may only amount to twenty or thirty dollars each month but that is a fine start. You basically have two choices on what to do with that new found money. You can either use it to keep paying down debt or you can set it aside for emergency savings. I recommend using it for emergency savings. It can feel like a punch in the stomach to pay a credit card way down and then have to run it back up to get your car fixed because you didn’t have any cash savings available.
The next step is to protect the wound, the wound being your formerly bleeding budget. The way to protect your budget is to avoid impulse buying, stop trying to keep up with the neighbors and reducing temptations. One of the best tools in your arsenal will be to carry cash and never use plastic. It will feel funny at first but believe it or not you can actually buy things with real money printed by the U.S. Government. You will definitely be able to control yourself when you are handing over cash at the register. Another way to protect the wound is to take full advantage of the opt out clauses with your creditors so they will not fill your mailbox with opportunities for you to spend money.
The last life saving step is to treat for shock. Now that you have somehow managed to survive the financial crisis and are on the path to economic recovery you want to make sure that you never, ever get into a financial crisis again. Remind yourself every morning of where you have been and where you want to go with your life. Life is short and tomorrow is not guaranteed for anyone, so do you want to spend the precious time you have left in this world dodging collections agencies?