Tremors In The Economy: Could Your Finances Survive The Next Crash?

Pixabay – CC0 Licence

History has taught us that, economically speaking, there are always warning signs prior to a major crash. A number of people predicted the 2007/8 financial crash that became known as the ‘Great Recession’; they were the canaries in the coal mine signaling an impending disaster, but unable to persuade enough people to listen – and worryingly enough, they’re sounding warnings again.

It seems hard to believe that another economic crash may be on the horizon when the aftershocks of the Great Recession are still being felt. However, there is no denying that there are a few worrying signs to be noted in an economy that otherwise looks to be doing very well. With high levels of household debt and a subprime car loan industry that some have predicted will be the first domino to fall, it appears that the economy is once again teetering on the edge of a precipice.

While the warning signs that people see in the economy may prove to be just that – a warning, and nothing more – those who are concerned by the outlook may wish to examine their finances and see how prepared they are for the next big crash. If you would feel a sense of peace of mind from going through this process, below, we’ve put together a list of areas you may wish to investigate.

#1 – Spending habits

Pixabay – CC0 Licence

In the event of an economic crash, the chances are that you will need to reduce your outgoings – or, as politicians tend to call it, “tighten your belt”. One of the best ways to get a jump start on the next financial crash is to examine your current expenditure to see if you can identify any signs of overspending and make cutbacks where appropriate. The money you save from this exercise can then be used to help fortify your finances in other areas, so you’re all the more prepared should an economic shock suddenly hit.

#2 – Personal debt

If, like most people in the US, you have a level of personal debt, then now is the time to begin to address this. If there is an economic crash, then there is always the risk of losing your job or experiencing cash flow problems; these issues are severe enough in and of themselves, but are far more difficult to deal with if you are also having to make substantial repayments to a number of different creditors.

    • Talk to your creditors. If your debts are substantial, you may be able to negotiate preferential repayment terms, or even offer to settle the account for lower than the amount owed.
    • Consolidate your debts into as few payments as possible. This allows for more streamlined financial management and, frequently, reduces the amount of interest you are paying. If your credit score is good, then conventional loan products are likely to be the best choice, so speak to your bank. If your credit score isn’t the best, then there are still options, so spend time researching to find the best personal loans for bad credit available.
  • Avoid sustaining new debt. Look to build an emergency fund to replace reliance on credit cards for any spending that falls outside of your usual budget.

#3 – Investigate different ways of saving

Pixabay – CC0 Licence

The two points we have discussed so far should result in you having more money available to you, either by cutting down on your everyday spending, or having to spend less money paying interest on debts. So, the question becomes, what should you do with the extra money the endeavors thus far have allowed you to find?

The sensible answer is to save it, but there is a warning from across the globe when it comes to deciding where to save it. Financial meltdowns of yesteryear have often gone hand-in-hand with banks refusing to allow people to withdraw their savings; this happened during the Greek financial crisis, as well as more recently in Ghana. While it is unlikely such scenes would be replicated in the US, it’s not impossible.

The best way to protect against such an eventuality is to separate how you hold your savings. You could opt for spreading your savings across multiple savings accounts, or explore non-banking forms of investment such as gold. One thing you probably shouldn’t do is try to do is save cash in your home; this means that the money is not earning interest, and is also vulnerable to problems such as burglary and fire.

#4 – Sustaining your lifestyle

So far, we have focused solely on your finances from a preparatory point of view; what you can do to ensure you are not thrown into panic by a sudden-onset crisis. However, it’s also worth examining your finances in terms of your ability to sustain your lifestyle after a crash has hit.

As mentioned, this will usually involve personal austerity, but there are a few things you can do today that make this easier, and thus place less strain on your finances in future:

  • Stockpile canned goods and freeze as much meat as possible.
  • If a product such as your shampoo is on sale, then buy multiple bottles at the lower price and store them for the future.
  • If you see an expensive electrical item being sold at a significant discount, then it might be worth buying and storing it for the future. For example, if your kitchen oven has not been replaced in the last decade, there is a chance it may break during a financial crisis, at a time when you can least afford to replace it. It’s therefore sensible to purchase a significantly discounted oven now, and then store it as a ready-to-be-used replacement if needed in future.

It may sound odd to spend more today in the hope of spending less tomorrow, but the above ideas have two things in common: they prevent against shortages in the future, and they utilize discounts that may not be available in the event of an economic crash.

In conclusion

Pixabay – CC0 Licence

If you are concerned about the tremors currently found in the economy, it’s well worth taking the time to examine your readiness in the above areas. Hopefully, the predictions will be wrong, and there will be no crash to recover from – but if there is, having all of the above in line will surely stand you in good stead.

Contributed Post.

If you like what you’ve read here, please let others know of this post, blog, and site.

And thanks for reading!  🙂

Profiting From Wrongful Termination

Image Credit

In a world where litigation is rife, perhaps we don’t need further encouragement to sue, yet if you have been wronged by an employer then it’s natural and perfectly reasonable for you to be compensated.

Now, as far as the law goes, the statement of this title isn’t strictly true, as the law is not designed to help you profit from litigation – it’s designed to put you back in the place you would be had you not been subjected to this unexpected wrong.

For instance, if you had a one year consultancy contract worth $5,000 per month, and the employer terminated the contract a few months down the line – without good reason – you would be entitled to something known as ‘expectation damages’, meaning you would be put in the financial position you would have been in had the company in breach of the employment contract carried out its side of the bargain.

Therefore, hypothetically, if your contract was wrongfully terminated, you could ‘profit’ from the deal as if you had fulfilled the contract.  Now, this is NOT legal advice – merely an overview of a principle in law known to highlight the fact you have rights, and when these rights are breached, you are in the empowered position to litigate to put right the wrong that has taken place.

That said, it’s highly advisable you work with a decent wrongful termination attorney, rather than take on the case yourself, as litigation can be a confusing and complex process that many a corporate lawyer will use to his or her favour in order to put a stop to your lawsuit before it’s even begun.

Therefore, half the battle is actually getting the case heard, as most good defence attorney’s will punch holes in a claimant’s complaint to the point they will try to persuade the judge to throw the case out.

In this vein, as once spoken by Mr Miyagi in the classic film, The Karate Kid, “if must fight – then win”.  

Here are some tips on winning your case:

 

  1. GET REPRESENTATION

As mentioned above, having legal representation is important in winning your case.  It’s not essential, as there is a concept known as access to justice which is intended to make it easier for litigants in person to present their case to the court if they are unable to afford an attorney – but, for an easier life, and potentially more successful outcome, if you can afford to get legal counsel then you should.

 

  1.  BE HONEST

In addition to the issue that you might commit perjury if you were to lie in court, if you do lie and are found out, it undermines your entire case and you could be liable to pay your employer’s costs in terms of defending the case; which could be substantial.

 

  1.  NEGOTIATE OUT OF COURT

It’s important to remember, that many cases never make it to the courtroom, are settled in court, and as we know from watching Suits, there’s often much negotiation to be had prior to the court date.

Therefore, make your case as strong as you can from the outset – as this will incentivize your employer to offer a settlement prior to it going to court.

Contributed Post.

If you like what you’ve read here, please let others know of this post, blog, and site.

And thanks for reading!  🙂