How to Survive and Beat the Financial Crisis in 2009

The holidays are over, a new year is upon you, and by all accounts, the economy is not going to be much better this year. A quick glance of your desk reminds you of the piles of unopened post-holidays credit card bills to be dealt with. Sounds familiar?

At this point you have a couple of options available to you:
1) Hope (and pray!) the economy experiences a miracle and you strike lottery this weekend.
2) Take control of your finances and have a great year in spite of the economic downturn.

Hopefully, you have chosen option 2 and to do this you will need some help. Following are some helpful tips that will make sure you not only survive but come out on top in 2009.

Goals
You have heard all your life that you should set goals, if you are like most people, that has not made it any easier for you to do it. Setting goals is important because they force you to take a solid look at where you are. You cannot plan a trip to Mexico if you have no idea whether you are in New York or London, can you? The same principal applies to finances, you have to look at where you are before you plan on where to go. That being said, here are a few tips to setting up your financial goals:

1. Assess all of your income, count every penny, and write it down
2. Assess all of your expenses, keep a running total for at least a week and do not skip that candy bar you bought at lunch.
3. Prioritize your expenses- Most important first and on down the line.
4. Trim unnecessary things from the budget for instance that Grande Caramel Mochachino you have everday. Only buy what you need!
5. Calculate outgoing from incoming and assess if there is any balance left to go into savings or entertainments.

Once you know exactly where you are financially, you will have to make some decisions. If the income is less than the expenses you are going to have to make some changes in your spending habit.

Frugal Lifestyle
Don’t, worry. This doesn’t mean you have to be a cheap to lead this lifestyle. All it is, is that anytime you have more to pay than you have money for it is time to see where you can trim the budget. The first and easiest thing you should do is to practice living more frugally.

1. Purchase a coffee thermos to take coffee from home to work. This can save you big money, especially if Starbucks is your coffee of choice. This is a potential savings of $1000 per year Alternatively, if you really cant live without takeaway coffees, then just cut down on the size. Do you really need a Grande Caramel Mochachino? Why not just settle for a Tall and still get to keep the extra change in your pocket for another cuppa another day.
2. Cut back or eliminate eating out, buying food and preparing it at home is always cheaper than a restaurant. Plus, it’s a healthier choice as well. Who knows what they put in those noodle boxes to make them taste like they do?
3. Make your errands count by having a to-do list. The less driving you do the more money you will save on petrol and time.
4. Make a weekly menu and grocery list, you will find that you can spend much less on food when you plan it out, plus you will virtually eliminate impulse buying.

Debts and Liabilities
So when you have eventually freed up extra cash you can now begin working on debts and liabilities. First order of business is to forget purchasing a new car, boat or other luxury item. This may seem extreme but remember it is more important to pay off all your debts and liabilities first before allowing yourself to indulge. Look at this as a war, you are going to war with debt and preparing for a life free from worry.

Learn
Finally do not neglect your education. Often when people worry too much about their finances, the first thing they will do is to cut everything down. There’s no reason why you can’t enjoy a little bit life even if you are in the red. The only thing you need to realize is that we don’t save stupid, we spend smart. There are plenty of good books, websites, magazines, software out there that will boost your ability to control your finances. Consider investing in these tools to equip yourself with these information and knowledge to solve the root of your financial problem.
Things may still look grim on the financial front but remember those who are prepared will survive and will become successful when the economy has soured.