Question:”I think I am better off spending my money and getting ready to live on whatever else is left of welfare. I have had it. What is the use in saving money?”
My answer is that you need to save money now. Really. There isn’t any indication that the Federal government or state governments will have any money for any programs at the rate that business is going in this country. Remember that govt needs money to get things done and they get it from taxes. Without businesses running and making money, you aren’t going to be generating tax revenue.
Without tax revenue you cannot afford social programs, armies, salaries of Congressional representatives. The same holds true at the respective state levels. The best thing you can do your for yourself is to save whatever money you can.
Even if you are paying off horrible interest rates on loans or credit cards, try and save at least ten percent of your paycheck for something. Even if it means a month from now that you can get to see that first run movie you wanted to (even though you can probably wait 3 months and watch it for a buck as a dvd rental or Internet download).
Psychologically you are better off with some savings because it addresses the need for control. Everybody these days gets feelings of things going out of control. Anytime you can get some of that control back in your life is a good thing.
By regularly trying to save money you also develop good business habits and you can also set an example for family members who aren’t so good at saving. Yeah, that is right. Most of them.
Seriously, this is your chance and in some cases it may be one that won’t come back for awhile if you are earning an income stream. First be grateful for that the chance and opportunity to be making some money and second, take advantage of it to steel yourself up against the crappy times that may be coming down the pike.
I can’t tell you how to run your life but since you are asking me the question I would strongly suggest even though you are paying off debts or feel that you are on the way out that you start or try and save some cash. It may not seem profitable now but I can promise you that you can’t put a price on being able to relax and maybe eat out once every few months or buy that one thing that you wanted.
In the news you can pretty much expect the next few weeks to be an example of a pullback. The stock market is looking for any excuse to take some money off of the table and any earnings news or downgrades (like YUM) are enough to set off selling sprees.
Guess what? If you are patient and don’t want to play the shorting game (and I don’t blame you) you can take comfort that in keeping with the larger sideways turn of events, the market will bounce back. As to how high or how low depends on if people and public are sobering up and realizing and I mean really getting it that we are still in a Depression.
We need full employment and right now we aren’t seeing it.
Question from a reader:”Anything I can do to help qualify for my home? I am a first time buyer and the rules seem to have gotten tougher than when my friends got their houses.”
My answer is indeed they have. Especially if they bought their homes a few years ago. The banking requirements are closer to tradtional loans the way they were twenty years ago instead of ten and you will need to put down a decent down payment most of the time – we are talking 20 percent – have a great, steady job, prove it, and have a clean record for credit. The pendulum has been swinging the opposite way from loosey goosey credit given to anybody who could spell “money” to going to the extreme where the old cliche holds true – only people who don’t really need a loan can apply and actually get the money. That is how commerce works.
Getting the documentation for approval for a home loan and even getting a house in the past has always been a bit of a drag. Ironically, you, as the person putting up the money ends up doing a lot of the running around and legwork and end up paying cash for it. Such is the nature of our real estate market and system.
If you do have a good gig and can get into a great house, I would say if you are planning on living in it as a home and not as an investment, go for it. Sure, property values may drop some more in a lot of places and maybe even where you are getting your new digs but remember the purpose of buying a home is to make it yours and to live in first and foremost. The investment angle is something to look at second. That being said, don’t buy a home in places where the market for recovery is several years out – like Detroit, for example.
Good luck everybody and keep the questions coming.
Aug 12 2009
Also, please don’t quite go anywhere yet. Having some tax issues or tax questions? Any problems with trying to make it through the financial Depression we are in that is making you depressed? Please read on.
I am expanding my practice and taking on new tax clients. If you are interested in having somebody who is a successful businessman and tax professional with integrity review your returns discretely and see if your tax guy or gal is doing a good or goofy job, please drop me an email or post a comment with your contact information and time.
I have experience in international business, small businesses, partnerships, multi-state tax returns (they can get complicated) and anything else you can probably think of.
I also do business consulting and have ran several businesses (still running a few) myself so you are in good hands.
If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book, Practical Money Making, that is listed right after his paragraph in this very post. There are some great suggestions and ways to survive the Depression we are in.
Interested in any of my books? You may want to make a stop over here. Please click through to purchase my books and some other interesting items that actually ARE on sale.
Have you read my book, “Bad Tax Idea, Good Tax Idea“? Please order it today. The tips inside can save you hundreds if not thousands of dollars! Tax planning should be done year round and not just two weeks into January or later.
Part of all the proceeds from the sales of that book go to Rett Syndrome research. One girl is born with Rett Syndrome worldwide every fifteen minutes. My daughter Arianna has Rett. Thanks for your support.
Kim Isaac Greenblatt
Save Money Now Really