Tuesday, February 5, 2008

Recession fears and the frugal person

I visit several financial web sites and blogs a day and most of the chatter seems to reflect economic fears including that of recession. The number of jobs are down, the number of new homes sold are down again, money is tight, people are spending less and the stock market is plunging--these all lead to increasing anxiety about job security, money and being able to afford what an individual or family needs. I am not a financial professional but here are my suggestions to help cope with fears about resession:

Take a deep breath and let it out slowly. Take a few moments to relax. Fear can get the better of anyone and make things seem even worse than it may or may not be. A few deep breaths can give you time to mentally step back from the thoughts that led you to your anxiety and give you a fresh perspective.

Put a few extra dollars away. If your spending plan has room in it, put unspent dollars into a savings account rather than spending it on that burger or shirt or toy. A few extra dollars will not be missed now and may be beneficial to the future.

Spend wisely. I plan on spending as I need and want, not just on gas and food, but on clothing, housewares and other things. However, I will be asking myself if I truly need that sweater, end table or bread maker (oops, bought the latter). Leaving a few extra dollars in a category or two gives me more breathing room if a more pressing need arises.

Get your taxes done before March. I like to do my taxes as soon as possible. If I am owed money (and I usually have a refund from my state taxes), it gets to my pocket quickly especially if direct deposited and I can use the money as I like. The sooner this task is out of the way, the sooner I can focus on the rest of the year and my financial goals.

Get together with friends. Connecting with people is beneficial on many levels including emotional. Have a potluck dinner or casual get-together that is both frugal and fun. Fostering closer ties with family, friends and neighbors also means there is a network of help when you need it. Have a party and enjoy time with people whose company you value.

Bolstering savings, getting some stresses out of the way and enjoying company only boosts quality of life. These strategies along with taking time to relax may help you deal with the economic stresses the many say indicate recession.

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