How To Survive Great Depression II

If you’re a failed banking executive who wants another trillion-dollar handout, all you have to do is look longingly at Congress and bat your eyelashes.

For the rest of us, it’s time to batten down the hatches, tighten your belt and do some serious prioritizing. Here are two articles that have helpful financial advice. There aren’t any brilliant new insights here; no magic wand. Just good old common sense. If everybody was following these guidelines, we wouldn’t be in this mess we’re in. And we won’t pull ourselves out of this Depression until millions of people start making the necessary changes.

This first article was written by an ex-convict. Prison teaches a person other things besides how to pick a lock, hotwire a car, and ninety-nine ways to kill somebody with your bare hands. You also learn — out of necessity! — how to stay out of debt. As the author says, in prison your creditor might settle things with a shiv.

Nothing new here, but too many people have forgotten (or never learned) that:

“The best way to get yourself in serious trouble is to take on things you can’t handle. Know your limits and accept what you can and can’t do. If you can’t handle credit cards, cut them up.”

“Your assets are only worth what someone is willing to pay…Too many people get caught up on artificial values on their house…and even their investments. Just because you think your house is worth $300,000 doesn’t mean it is— it’s worth what a willing buyer is going to pay.”

Yeah I know — “Duuhh!” But again, if everybody was using these common sense guidelines, we wouldn’t be in the fix we’re in.

Most of the comments at the end of this article are sympathetic, all except for one dickwipe who rakes the author over the coals for being an ex-convict.

3 Steps Back to the Sanity of Cash by MP Dunleavy also has some good common sense advice.

“If every ounce of credit now available to you, in the form of cards or home equity or whatever, if all of it dried up, what would your life be like? The fact that that's hard to imagine is a sign of how deeply entrenched credit-think has become.”

When you go shopping with a credit card, you’re apt to have just a vague idea of how much you spent. When you pay with cash, you probably know the damages right down to the penny.

She says “Credit creates a fog. Cash will snap you out of it.”

Both of these articles have useful advice. Again, nothing you haven’t heard before. The steps they describe are simple but painful.

Maybe the economy will start picking up soon; maybe not. There’s an awful lot of doom and gloom in the financial news every day. Best to be prepared for the worst possible scenario.

cross-posted at Bring It On!