As we saw on last night’s 6:30pm with George Negus, the economy is far from stable. Professor Keen and others have been saying as much for quite some time now.
The economy shrunk by 1.2% in the last quarter, the biggest contraction in 20 years. We’re nervous, lots of homeowners are ‘house poor’, we’re spending less and it’s having an impact. Not to mention the impact of floods and cyclones! Businesses are closing down in near record numbers. The huge Borders Bookstore chain has just collapsed adding to those who have lost jobs and are feeling the crunch of our financial woes. In short, trouble is finally coming to Australia. It’s rumbling beneath the surface and in these times we need to make some smart decisions. Complacency is not an option!
So what can we do? One of the biggest issues is debt. Many of us have lived beyond our means and continue to do so. If we want to survive any financially volatile time, however long it may last, this is an issue we’ll have to tackle (if we haven’t already). For one, this means paying down the balance on credit card debts and not spending more than we’ve got. You’re nan would have called this living within your means.
Government wants us to spend (remember Kevin Rudd’s stimulus package?) and so do retailers. Advertising is constantly telling us to do more, buy more, have more, and that we deserve more. It’s time to look past the clever, ear tickling marketing and see that many companies are just trying to drum up business for themselves and lure us in. They don’t care whether it’s in our best long term interests! We, you and I, are the best judges of what we really need and we’ll do ourselves a favour if we take control of our spending. We’re used to having extra to spend and piling up on things we don’t need. Times change. If we don’t need them, let’s not buy them. Rather, let’s invest in things we really do need, buy quality products and buy them outright as much as we can to save us on interest. Smart shopping, within our means, will help us ride out the storm just that little bit better.
Take Advantage of Balance Transfer Offers
If you’ve been spending money like there’s no tomorrow and it has finally caught up with you, then why not apply for a balance transfer credit card? When you’ve locked in a low interest rate on your transferred balance, all that interest you used to pay can be used to get rid of your debt! This one simple change can literally save you hundreds of dollars. So don’t wait around!
Budget for the Future
Another basic fundamental thing you can do is budget well and think ahead. If this isn’t your strong point, find a friend in your social network who’s good at it or get some help online. You’ll come up with plenty of helpful tools to get you started if you Google ‘free budgeting advice.’
If you know roughly what’s coming in, this can guide your spending. Always work things out conservatively and plan for unexpected things (they’re inevitable). In our money management, one of the worst things we can do is spend every penny without leaving a buffer. Prioritise some savings in your budget. When you finally are out of debt, it will help keep you out. If you’re not, get your debt paid off first thing, then save to avoid getting back in debt.
If you are already carrying more credit card debt than you’d like to admit, one key thing to get your balance down fast can be transferring your debt to a better credit card with lower rates and fees. Check out our ‘Beat My Card’ tool to compare your card with what else might be out there.
We’ll get through this, together!
Image: Pittoloj
Sarah is a twenty-something living on the Mid North Coast of New South Wales, Australia and works with a not for profit organisation. She’s passionate about learning from and working alongside the disadvantaged, loves keeping healthy and drinking chai tea. Sarah has also contributed many of our 
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