Friday, January 23, 2009

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Taking Care of Your Personal Finances #1



Quote of the day: 
 To open a shop is easy, to keep it open is an art-Chinese Proverb

Hello eveyone,so far so good with the new year isn't it, as the month rushes to a closing end i can't help but wonder about the world economic meltdown and it's travails. 


As the global financial crisis soars,and with companies declaring loss after loss amid weakening demand for commodities including oil,which still hovers over $42.90 per barrel as at today.

Global Crisis?
The global financial crisis is an ongoing issue which has put a number of countries into a recession and the major stock indexes into a downward spiral.

One may now start to ask,what really is going on?. Companies have filed for bankrupcy, there has also been company mergers as well as job losses in the millions  worldwide. It is indeed a time for somber reflection. 

With slowing revenues companies that have declared losses include Microsoft (which is to cut 5,000 jobs in the next 18 months), Nokia, Samsung, Intel (they are closing some older factories in the U.S. and Asia, displacing as many as 6,000 employees, not all of whom will lose their jobs), Lg Electronics,Ebay amongst many other companies. 

We all know of that saying 'saving for the rainy day', right? I think the rainy days are indeed upon us people. As this isn't just your normal drizzle of a rain,literarily its raining debt and job losses so to speak. So you may ask yourself,where do i fit in all these and how do i brace myself for the tough times ahead. 

If you haven't started now is the right time to begin to  do the following :


1.  Define wants and needs
In economics class, we were taught about the scale of preference. An itemized list of things according to priority. What this means is that you set your most wanted things to the least wanted things to satisfy your wants (hope my memory is still good as i try to recall that economics class).
Anyways, put in today's happenings,what this means is that you should only buy things that you really need (can't do without),
 like food,groceries etc. Things that you want (luxury items), like a new car, shoes, bags,wristwatches,gadgets can all wait for now.

2. Save every Penny
If there's something you should do different this year, its to save every little money that you can lay your hands on. It not only helps to build up you 

bank balance, but also trains you to be a saver. You have to become frugal if you aren't already. 

3. Cut back spending
Start cutting back on your weekly spending expenses. Buy less phone call cards,and now that fuel's gotten cheaper-that helps too,also look for bargains whenever you go out shopping,etc. The aim here is to  save as much as you can on the cost of goods and services. 

4.Rules 
Always seek for new avenues to improve your earnings by not putting all your eggs in one nest.
And lastly remember warren Buffet's (Richest Man in the world right now)
Quote -Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. 

So as you go about saving, do remember that the rainy days are upon us people. Goodluck!!






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