The recession has led many to feel hopeless, but practical and spiritual solutions are within reach for those who truly want to find a more rewarding life. By applying spiritual and practical principles, Idowu Kotila brings consolation to those who are confused and suffering. These solutions may start with God, but they end with the actions that people take. Instead of relying on big government to solve your problems, it's essential to plan for and react to a crisis. This book helps you judiciously use your income; avoid wasteful spending; appropriately manage credit; take care of your family. Packed with powerful biblical verses, this book helps you move closer to God and transform your state of thinking and how you relate to others. When you make God a priority in your life, abundance is virtually guaranteed. The recession is an opportunity to act. Take the necessary steps to get your spiritual and financial house in order, and reap the rewards as you Survive the Recession.
SURVIVE THE RECESSION
Spiritual and Practical Tips to Find a Better Financial FutureBy Idowu KotilaiUniverse, Inc.
Copyright © 2010 Idowu Kotila
All right reserved.ISBN: 978-1-4502-3623-2Chapter One
FINANCIAL COURTESY
One of the major cautions we need to put into consideration during the recession period is how we handle our financial situation. No matter how rich or wealthy we are, if we don't manage our finances wisely, we may run into financial mess at end of the day. We should try and put every single ways of our spending, savings and investing into consideration.
Building up an emergency saving plan is one of the best ways we can prepare for recession. We want to be sure to have money set aside in a rainy-day. Fund that we can get to immediately, without paying a penalty. The best place is a money-market account at a federally insured bank, savings and loan, or credit union. We should try to build up an emergency savings fund that equivalent to three months' worth of living expenses. We should try and save more through an automatic saving plan. Not a 401(k) or other retirement plan. But they are for money we won't need for a while. When we're preparing for tough times, we need to focus on money we could use soon. An automatic savings plan arrangement will let us have a specific amount of cash automatically transferred from our bank's checking account to a mutual fund each month—a money-market mutual fund or short-term bond fund are our best choices.
Pay down our credit card debt is another way out in recession period. In a recession, we really need to make every penny work for us. Using our hard-earned cash to pay 12 to 23 percent interest on credit cards is not wise. So the more we can reduce our credit card debt now, the better shape we'll be in if times toughen. Whenever possible, we should try to pay off our card balance in full each month. Certainly, we should work hard to pay more than the minimum.
Recession time is the time to review our homeowners' or renters' insurance, life insurance, health insurance, disability insurance, and auto insurance coverage. We want to make sure that if our household has a financial calamity like sickness, our car has an accident, house damage, and job loss we'll have protection. If we can't bear the thought of wading through our policies, we should call our insurance agents or employer's benefits' department and have them checked our coverage for us. Who knows? We may find that, circumstances have changed since we bought the policies and we don't need as much coverage today.
Another way of helping ourselves is to buy another life insurance. Say for example, if we have term life coverage that's several years old, we should shop for a new policy. Competition might have lowered prices so much that we can probably buy the same coverage on better terms than were available a decade ago, even though we're 10 years older. For instance, a 40-year-old female nonsmoker could pay under $30 a month for $500,000 worth of 20-year level coverage. Comparison shop for policies at accuquote.com. We should look for a policy worth about five to 12 years of your salary. Our family will thank us for making this smart move.
Spend less could save us a few bucks that we could then save in our emergency savings fund. This is one of the hardest money-management moves to make. Most of us enjoy buying things and find it difficult to break habits, like that daily Starbucks Venti Cappuccino, cigarette, beer or the weekly restaurant visit. If we can put it into moderation, there are chances that, we can trim our spending. If we are not convince, we should experiment how to track our spending by write down or keep the receipts of everything we spend each day, for a month. Then total up the categories (food, clothes, entertainment, transportation, giving, etc.) and see how we can squeeze 3 -12 percent out of those totals. Categorizing helps us identify our weak points. Who would have guessed we spend like $250.00 a month on lunch? But now that we're aware of it, we can make the decision not to do it anymore. Keep track of the money we're saving and put it in an account earmarked for paying down debt.
Hard economic times mean more layoffs. So we should update our rsum now, to be sure it's current in case we need to apply for a new job. We should try to contain the rsum to one page and avoid making it flashy or frilly. We want our work experience to stand out, not the document describing it.
We should try as much as possible not to max out our 401k or retirement savings. Despite what we've heard, stuffing all our spare cash into our employer's 401(k) savings plan isn't always a wise strategy. Instead, consider contributing only as much as we need to get our company's full match. Then stash any extra retirement savings in a Roth IRA—available from a bank, broker, or mutual fund - where earnings and withdrawals are tax free. "Basically, $1,000 in a Roth is worth more than $1,000 in a 401(k), because when we withdraw 401(k) money, we'll pay taxes on it," says Jean Fullerton, a financial planner in Manchester, NH.
We should put the ideas of saving for child education as secondary most especially during the recession. People save for their children's college educations, but we've only got one chance at retirement—and we can't take out loans for that," says Eric Tyson, author of Investing for Dummies. We should not skimp on retirement savings in order to fund our kids' higher education. If we're putting money into a 529 plan, we should be careful how much we invest. We'll pay taxes on any 529 withdrawal that isn't used for education costs—so if our child ends up going to an inexpensive community college instead of a pricier private school, we could pay a big penalty. Aim to save enough in a 529 plan to cover only half of our expected college costs.
Take notice of all we have is another way of saving cost most especially during the economic downturn or disasters. If anything happens to our home (like a fire or flood), having a clear record of our belongings makes dealing with the insurer much easier. But many people don't spend the time to do a proper inventory. Here's a shortcut: Take snapshots of each room and all the things in them (get brand names and model numbers), then we can upload them onto our computer. Make a CD of the photographs. Even easier: we should use a video camera and narrate all the necessary details. Then we are to keep a copy of the video or the CD in our metal lockbox at home or in our bank's safety deposit. Doing all these will definitely save us money.
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Learning how to use Money software is very important during hardship condition. It doesn't matter if we choose Quicken, Microsoft Money, or another leading brand. They are all similar and can help us get our financial life in order. "I think the biggest mistake the average person makes is failing to maintain adequate records," says Roy Frick, a licensed public accountant in Ocean City, MD. "When we use software, that job is a whole lot easier." The headache is in the setup, which can take a few hours. We best bet: Tackle this job as we're doing our taxes, when our records are all assembled. We should set aside one Sunday afternoon, and get it done. This will definitely help us against mismanagement of our finances.
Credit fixing is another way of bailing ourselves out of financial mess. Majority of us read the papers, listen to news, so we know: Many mortgage companies are in financial trouble after making loans to people who couldn't pay them back. Now these institutions are requiring better credit for new mortgages and refinancing and debt consolidation, likewise credit cards companies are friendlier with people with good credit scores. So having a decent credit score is more important than ever. Luckily, it's not out of our control. A good chunk of our score is based on timely bill payment. So we should try to hit those due dates every month this year.
Other ways to make ourselves look better on paper: Pay off debt, keep old credit cards to lengthen our credit history, and fix errors on our credit report. We can get a free copy of our credit reports at annualcreditreport.com. It used to be possible to boost our score by getting our spouse (assuming he's creditworthy) to add us to an account as an authorized user.
When the bills are piling up, but we're so far behind, we can't bear to open them. When we do, realize there's only enough or not enough in our account to make the minimum payments. We are not alone. The average American family is now a debtor. We owe more on our homes, cars, and educations than any previous generation has. But there's a lot we can do to improve our own debt picture. If we do care much about it, we can get rid of our debt—or, at the very least, a significant chunk of it—in just a few months. What we need to do is so simple, we should take stock we can do that by Sit down at the computer or with a pencil and paper and make a list of whom we owe money to, how much we owe, and what rate of interest we're paying on each of those debts. The main culprits will be our credit cards. The cards with the highest interest rates are costing us the most, so we need to work on those first.
Checking our credit score is very crucial under this situation. This number represents how reliable we are when it comes to paying back money we've borrowed. A high score will help us qualify for one of those low-interest credit cards. (Our score may also affect how much we'll pay for auto and homeowners' insurance; it may be a factor in whether we can rent an apartment or whether we can get some particular jobs). We can find out what our score is from myfico.com. This number range from 300-800 points. Anything over 600 is good, above 720 is great. But if it is below 660 points we have to spend few months to improve it before we can get good interest rate. Then we should try to consolidate our debt onto a single card with an interest rate lower than what our current cards are charging us. We'll lower our monthly payments and pay off cards quicker.
Find a way of reducing monthly bill. Tackle the larger bills we pay each month can led to financial buoyancy.—for our phone, Internet service, and utilities, for example. We can call the provider of each service and ask if there's any way to lower the amount. For instance, some people don't use all their cell phone minutes. So switching to a plan that offers fewer minutes can shave $15 to $30 a month off our bill. Websites like lowermybills.com can help guide us. Also, we explore whether we can lower our interest rate on types of debt other than our credit cards. We should check our local newspaper and hsh.com for a listing of current mortgage rates: If lenders are offering a percentage point less than the rate we're currently paying, consider refinancing. Likewise, compare the rate we're paying on our car loan with the rates available on used-car loans; check capitalone.com our local credit union. If we can save a point or two, we should refinance that loan as well.
We should pay our bills as they come in rather than once a month. Why? Paying bills as they arrive gives us a chance to see—in real time —what we're spending. Say the electric bill is higher than usual because of a recent heat wave. Most people will spend a little less on other things throughout the month to compensate.
We should have a spending break even in holiday season. It's never too early to start budgeting for the holidays. This year, we should try to spend only what we can afford to pay for out of pocket. (If we start buying modest gifts by the beginning of the year, we can spread out the expenses.) We may not reduce our debt at all in the month of December. But that's OK. The goal is to avoid racking up enormous new bills.
Ask how a particular promotion works. For example, a "10 for $10" sale may not require that we purchase 10 items; we might be able to buy only what we need and still get the reduced price. (Use a coupon, and we just might end up paying nothing.) Sign up for store loyalty cards. We'll get generous coupons for products that we tend to buy regularly. Feeling high-tech? We can try downloading online coupon onto our grocer's loyalty card. At shortcuts.com, we choose the coupons, add them to an account tied to the loyalty program, and redeem them when we show the cashier our card. Visit grocery stores' Websites to find valuable savings by looking for grocery coupons and take with us when we go shopping. When it's not prohibited, combine coupons issued by the store and those offered by the manufacturer for the same item.
We should take time and ask whether the store matches the advertised prices of its nearby competitors. If so, we can save time by bringing in other stores fliers, and then get all of our savings in one place. And if the store accepts its competitors' coupons, we should bring those in with us.
Whenever possible, we should gas up our car at super store fuel centers where the average cost per gallon tends to be lower than at local service stations. Some superstores offer fuel discounts based on our grocery tab. And search for stations that will charge less if we pay cash. For example, Holiday Gas stations offer discounts for any customers that have Cub foods grocery stores coupons for any gas bought. For the lowest gasoline prices in our area, we should visit the gasbuddy.com site.
We should try and keep our tire inflated to the proper pressure; that will improve our gas mileage by about 3 percent or so (we should check the sticker on the driver-side door for our car's correct tire pressure). And we should try to remove all the junk from the trunk: An extra 100 pounds in our vehicle may reduce mpg by about 2 percent. Likewise, driving with the air-conditioning on can increase our gasoline consumption up to certain percent, too. Unless it's unbearably hot, rolling down the windows, or applies solar film to the inside of the car help to cool down the interior part of the car.
We should try and look for online goodies by Snap up deals from grocers' online photo centers. The per-print cost is often low (starting at about nine cents a photo); uploading from home is remarkably easy; and we can pick up the pictures in the store, eliminating any expensive shipping costs. Sign up for our store's e-mail newsletter, and we'll receive coupons and special offers, such as free prints for new customers or free enlargements.
Look for "grab bag special" on brand-name bathing suits for our kids. The retailer picks out the color and style; we reap savings of 50 percent or more. Swimoutlet.com offers great service and selection. The Speedo Website (speedousa.com) has good grab bag savings, too. Signing up for free samples of health and beauty products online is highly recommended at this time. We can order them at sites such as freeflys. com, mysavings.com, startsampling.com, and Wal-Mart's instoresnow. walmart.com. We may need to answer a few questions, but we generally won't have to pay for shipping. And at these sites, we won't be put on spam lists.
Zap exorbitant vacation costs by swapping home with another family. It's not too late in the season to make a trade. Home-exchange networks charge between $65 to $229 for listing our home in an online directory. We'll find huge selections in the United States and abroad on intervac. com, homelink.org, homeexchange.com, and Vacation Rentals by Owner (vrbo.com). America Home Exchange (exchangehomesoia.com) is exactly what it sounds like and has no membership fee. Also free: asking friends or friends of friends if they're interested in a vacation switcheroo. We might even be able to swap automobiles and save ourselves the cost of a car rental.
While trying an urban vacation, Maybe Chicago or Philadelphia isn't the first places that come to mind when we think of a summer trip. But consider this: While prices at the beach and resorts spike in summer, business travel slumps—so many big-city tourist bureaus offer bargains, especially on weekends. Subway passes make transportation inexpensive and easy. And 11 metropolises (including New York City and Seattle) have passes that will admit us to attractions at up to 50 percent off the full-price ticket (cost: $34 to $247; citypass.com).
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Excerpted from SURVIVE THE RECESSIONby Idowu Kotila Copyright © 2010 by Idowu Kotila. Excerpted by permission of iUniverse, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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