Friday, August 14, 2009

Fight Recession With Your Savings

The following is the next in the series of guest posts:

It is important to equip yourself financially when you know that you are reeling under a recession. Recession has been seeping into the economy for quite sometime and if you realized that, you should be preparing for the rainy day. It’s all about your savings! How well you can manage your cash so that you don’t have to borrow from Paul to pay off Peter.

With the ongoing recession, you cannot claim that you have a secured job. Since employers all over the world are on a cost cutting spree, many have lost their jobs due to the downsizing and you may be in queue! So, have you thought about the consequences of losing your job? The situation is still worse if you have many family members to depend on you.

However, it is never late and you can bring about a change in the manner in which you handle your finances if you want your financial stability to change for the better. Cost cutting and prioritizing your expenses is the mantra of your financial success.

Save from your active income
It is important that you live within your means. Try to strike a balance between your income and your expenses. It has been observed that majority of the consumers that fall into debt are unable to balance their incoming as well as outgoing cash. After you have kept aside cash for meeting your monthly financial obligations, make sure you keep aside few dollars to build up an emergency fund.

Save from your passive income
In addition to your active source of income, if you have a passive source of income too, try to make the best use of the proceeds of the same so that it can help you when you are cash strapped in future. Your passive source of income can be from profits you earn by investing in any form of investment vehicle. It can be trading currencies in the forex market or trading stocks in the stock market.

Studies reveal that there are many consumers that have used proceeds of different forms of trading for paying off debts and for saving for the rainy day. You can do it too. Financial experts are of the opinion that it won’t be before 2011 when the economy will have recovered fully. So, when uncertainty rules, your best weapon to fight recession and tame financial stalemate are your savings.

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