The Personal Effect of the Financial Crisis
With the steady stream of bad news coming at us from all directions, it’s clear that the financial crisis is taking its toll on the economy. That being said, many of us are no worse off and may be able to take advantage of the current situation.
In many areas, prices have declined significantly. From car dealerships to retailers, there are certainly some great deals out there. A sagging economy may raise your risk of job loss, but if your job remains secure and your rent or mortgage payment is unchanged, declining expenses should actually place you in a stronger financial position. The rapid decline in gas prices has also had a significant positive effect on many household budgets as well.
Just like falling home prices only affected those trying to sell their homes, or perhaps those with large home equity lines of credit, so too do many of the negative attributes of the crisis only affect a small percentage of the population. The major declines in the stock market are disconcerting, but mainly for those who were preparing to sell soon. Buy and hold investors with a longer investment timeframe are gleefully buying up as much stock as they can get their hands on while prices remain low.
The negative effects of the economic crisis are significant and will hurt many families’ financial situations. I certainly don’t mean to downplay these effects. Rather, I ask you to consider whether you are actually any worse off. A surprisingly large percentage of the population will likely find themselves in the same, or better, financial situation despite the current crisis. Taking a look at the numbers and determining what, if anything, has changed in your life will help you determine the personal effect of the crisis. Discovering that you’re actually in a stronger position will help to balance the bad news that, though inapplicable to you, still seems to come from all angles.
Have you been affected positively or negatively by the current financial crisis?
Saturday, January 10th, 2009 at 6:45 am