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Looking for a Bailout - Look in the Mirror! Unemployment is up . . . home prices are down . . . and no one is really quite sure where the Stock Market is going to land. In these challenging economic times, it?s easy to be worried about the country?s banking, credit and overall financial health. Making sense of the bear economy is really no bull and Wall Street firms continue to be given amnesty from financial blunders. The media bombards us with complicated financial terms and our anger and angst continue to grow minute by minute. The anecdotal, ?it?s a good time to invest?, ?keep maximizing your 401(k) ? you?re young? and the laughable ?don?t panic? do not suffice. We continually hear talk of trillions of dollars being doled out to financial institutions to rectify the global economic crises only to find ourselves personally in the same holding pattern we were in months ago. The analysts have crafty answers for Wall Street and Main Street but none for what is happening on ?Our Street?. Get used to it! TARP may be a lark and the credit crunch has tightened even more. Have you noticed those large multimillion dollar high-rise projects with the cranes sitting in the same position for months on end? And, have you been to a house warming party lately? Just when we think and hope that things will get better, we hear of some executive immaturely spending our tax dollars on office upgrades ? are you kidding me?!? Listen up and listen carefully. When the market is up, everyone is smart but where are the smart people now? It is the first time in U.S history that we have a negative personal savings rate ? a result of our unchecked consumerism. Our best bailout option is not going to be the government or some bank or money falling out of the sky or that lotto ticket in your pocket ? darn it, forgot to check my numbers last week, oh well. We need to look squarely in the mirror and see what part we have played in getting ourselves in this predicament and what we - not the government - can do to survive it. When it comes to cutting back, no one says it?s going to be fun but it can be relatively easy. It will, however, require a shift in our thinking, spending and saving behaviors. Here is the reality of what is happening on ?Our Street?. Unemployment is up over 7 percent, half of American households live on less than $45, 000 a year and one out of five households lives on less than $20,000 annually. The average person is carrying about $30,000 dollars in credit card and school loan debt. Women continue to make 70 cents on the dollar in comparison to what a man earns and health care costs continue to capture a larger percentage of our income. Add in the collective psyche of consumption at ? literally ? any cost and one can see why we are in our current predicament. But, unfortunately, many have not been seeing the realities in our personal lives and desperately need to make a change. We are currently in the midst of a financial meltdown and will have to tackle it with the resolve that our depression-era ancestors exhibited. I cannot fix poverty or cure our health care dilemma and giving you a complete list of money saving tips is too cumbersome. But, I will impart a few financial concepts to consider that I know will assist you in surviving this economic downturn. Go ?Old School? Our grandparents lived a lifestyle that included the use of cash. They would never spend 4 dollars on a cup of coffee or spend a whole check on a purse or a night on the town. They learned to do without and valued the difference between a need and a want. Sitting down and talking with them is a good start ? and take notes. When they received extra money, their first thought was how to save it where our generation typically thinks of how we can spend it. We cannot afford to financially sacrifice future protections with present day comforts. It?s amazing what the $4,500 used to buy those ?spinners? could be worth in 30 years if invested in an Individual Retirement Account ? it?s time to wake up. When credit was used by the pre ? baby boomers, it was used to finance big ticket items and not used to enlarge ones lifestyle. It is really quite simple; if you earn $50,000/year and have a credit limit of $30,000, stop living the lifestyle as if you make ?$80,000 and start living as if you make $30,000. The first law of savings - live on less than you earn! Cost of privacy vs. Cost of groceries We live in a very ?what is mine is mine and what is yours is yours? culture. We cannot wait to move out of the house of our parents and be on our own ? this is uniquely the American way. Individualism is something we cherish as Americans and can be costly; but what may actually be one of our best financial moves is partnering up. Getting a roommate/housemate has many financial advantages. Instantly expenses are shared and you will save on utilities, cost of groceries and house maintenance. All parties will have the advantage of saving extra money. If you are going to college in your hometown, stay home with your parents to cut costs. Don?t be so quick to give your money away to an apartment complex or dorm room. You may be crying about an occasional lack of privacy but you will be laughing all the way to the bank! Paper or Plastic? The cultural and attitude shifts from using cash to using plastic have cost us dearly over the years - literally. Debit and credit cards have given us a sense that the pool of money is limitless. Using cash more allows one to tangibly feel ?the pain of paying? more when they part with cash. A study conducted by Priya Raghubir in the Journal of Experimental Psychology: Applied speaks to this. A simple savings strategy to kick start your change in saving behavior is to save your five dollar bills. When you use cash to pay for an item and receive a five dollar bill in change ? save it. One father joined my ?$ave your 5s? campaign and saved his fives for a year and paid off his car. Ursula Burns categorized herself as a pathological spender and never saved ? she too is a 5s saver and has over $1,100 saved in her first year ? ?...it gives me such a feeling of empowerment?. If you really want to get serious about saving, use cold, hard cash and join the campaign at www.MarilynLogan.com. Victim to the economy ? no choice? I certainly understand that there are some economic forces that we cannot control. But, we do have choice over our needs and wants and choice as to how we spend our money. Even people living pay check to pay check have found ways to successfully save. You have the choice to use credit wisely or to extend your lifestyle ? the latter is what has gotten us into trouble. We must choose to pay down debt aggressively or risk becoming a slave to creditors. I understand spending is healthy for the economy but one less manicure or one less meal out won?t kill you ? modest living does work! Being vigilant about paying items on time has to be paramount ? increases in interest rates and late fees, after one missed payment, can be savings destroyers. And, unless your last name is ?Jones?, stop keeping up with them! That being said, spend money you can spend and do not just wait and see what the government is going to do; get involved, get educated, look in the mirror and create your own bailout plan! Now, get your money right! Marilyn Logan ?The Money Lady? Author/Speaker ?I Can?t Afford to Marry You? A guide to understanding the true cost of love. www.marilynlogan.com Copyright mlogan enterprise 2009