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How to Survive a Personal Financial Crisis

Being prepared isn't just putting some buckets of wheat, rice and beans into your storage. It also means being prepared to survive a financial crisis.

As we live our daily lives, we are well aware of the scenarios around us, of countries and companies in trouble financially. We live in an interconnected world and a global economy. A financial crisis that happens on the other side of the planet or the other side of the city can affect our financial survival.

How secure are you financially?

 Let's look at some of the things affect us financially at the present:

financial crisis - inflation
Inflation? Or Deflation?

  • Most governments are deeply in debt and do not have the money to continue their out-of-control spending.
  • Gas prices continue to rise - fluctuating at higher and higher levels.
  • Fear of rampant inflation. (Are food prices rising where you live?)
  • Percentage of unemployed has not decreased much in several years.
  • Incomes have not risen along with inflation.
  • Welfare roles have greatly increased.

These are just some of the indications that a financial crisis may be here or may be coming.

7 ways you can prepare and plan

You can't save everyone but you can do much to prepare your family. So where do you start?

  1. If you have debts, don't pay them off — just pay the minimums. Now I know that contradicts probably everything you've ever been told. But here's a question for you:

    Would you rather have no debt and no cash to pay rent and buy food, or would you rather have debt and some cash to survive? Cash, right? Me too.

    That’s why you should not get over zealous and try to pay down your debt right now. Under “normal” circumstances, paying down your debt is a great strategy. But we’re not in normal mode anymore.

  2. Do everything you can to keep your job. As long as you have income coming in, you should be okay. In a growth economy, it's much easier to find a new job, but this isn't that kind of economy.
  3. If you have an interest-only loan but have also been making principal payments, stop. Just pay the interest for now. When things improve and there is more stability, you can start paying down the principal again.
  4. If you're paying a student loan, check the rules of your loan. Many government sponsored loans do not require you to pay on it if you are a student. Take a class (one that increases your skills or employability) for $50 and find out how to stop paying on the loan - for a while.
  5. Renegotiate your credit card payments or interest. Call the credit card companies and ask if they will give you a better interest rate. Or take advantage of a low interest or no interest balance transfer.
  6. Stop contributing to your children's college savings plans. (You can start this up again when the economy improves.)
  7. Set up a budget. Go through your expenses with a fine-tooth comb and postpone, eliminate or reduce any that you can.

The bottom line: hoard CASH by making minimum payments on all debts. You might also want to put a bunch of that cash in a safe in your home rather than a bank. You know — just in case there's no electricity and the ATMs don't work, or the bank fails, or the FDIC runs out of money to pay everyone should there be a run on the bank.

Do not expect help from the government. If you are a small business person and your business is in trouble, do you think for one minute that the government is going to bail YOU out? Can you raise your prices 100%, 500% so that you can make a profit and keep your business going in these tough economic conditions? Only if you want to kill it completely!

Self-reliant people do not need the government to provide all the services that it tries to give us. Governments that provide too much take away our power and, unfortunately, too many people are allowing it. They are willingly giving the government their power.

Yes, you can survive any financial crisis. All it takes is a bit of creativity, motivation, and determination to make it happen. There are so many helpful ideas there that you might spend an entire day reading about ways to become more self reliant, and therefore, able to survive a financial crisis in your life.

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