Ever since the economic turmoil began, it seems everyone has a different opinion on what we should be doing with our money. The advice can sometimes be confusing since it doesn’t seem like anyone is really sure of themselves or what the economy will do in the future. But it’s important that people first think about what they should avoid doing with whatever savings they may have during a financial crisis.
Good Morning America’s Mellody Hobson recently offered some simple tips on what not to do with your money during our credit crisis. Safety is a big concern for many of us after hearing of numerous banks going under in the past few months. Hobson advises us to resist the temptation of pulling money out of your bank and putting it under the mattress. This is not the safer bet. With the FDIC insuring the money you have in the bank, you can put your worries aside and keep your account active.
Hobson also urges people to not go another day without checking their credit report and score. That credit score is a very important number when looking for a loan, buying a new home, or obtaining a credit card. And the fact that there could be mistakes on your credit report makes it all the more important to check your score now and make sure your history is correct. According to the Public Interest Research Group, one in four credit reports have errors that are big enough to disqualify you from getting a home loan or even opening a bank account.
Another tip Hobson gives is for people not to be shy about calling their creditors. If you have been falling behind in payments or fear that you will, don’t delay calling mortgage lenders, credit card companies, and your bank to tell them about your situation. Bottom line is that they do not want you to default on your payments and are likely to make a deal with you. Maybe your credit card company can offer you a lower percentage rate, it doesn’t hurt to ask.
For a complete list of Mellody Hobson’s tips on what not to do during the credit crisis you can visit: http://abcnews.go.com/GMA/Story?id=5883206&page=1
What do you think of the tips offered above on what not to do during our credit crisis?
Is there anything you have been avoiding doing with your money since the crisis began?
we stopped using our gredit cards a year ago and I feel this is one of the best decesions I have ever made.
i agree too. we don't use our credit cards.
I agree completely... I personally have stopped using credit cards, and will now only pay cash for everything I purchase, or use my debit card. I find it is much easier to budget and avoid overspending. I agree with letting lenders know what is going on.... I had a situation with a school loan I was having trouble making the payments on. I was completely embarassed, as I had lost my job and could no longer pay the amount that was due. I let it go for a few months, and then I worked up the nerve and contacted the company. It was amazing how much they were willing to help. Comapanies are willing to help I have found, if you can just forget your pride and admit you need it...
I agree wit hthe advice in this completely. Letting lenders know ASAP if you are having difficulties always looks better for you and can help avoid sticky situations. You all are so right though, we do need to continue to spend in order to keep things going. Hmm...maybe I'm help boost the economy on Black Friday :)
We need to produce more--that is the problem! We like to consume, we are finding out that we don't like debt, and we are (gasp) discovering that war and bank paper messes are not the best way to stimulate an economy. The only way to have less debt, less bubbles, and still consume what we like is to be more productive. We need to do what this country does best: innovate!
I know it's just before Black Friday, but I was in the mall yesterday, and there's nobody in the stores, it's scary! People just aren't buying, which in turn will cause more stores to go under. We were looking for major sales and markdowns and if we didn't see it, we left the store. 20-30% just wasn't enough to get me into the store.
It is a very fearful time we live in and things are not going to change over night; as some seem to think with our new President. No one can make that kind of change that quickly. I sure wish they could though!!! This country is in such a mess. It took many, many years to get here and will most likely take 10 times longer to get straightened out; saddly to say. All we can do is hope and pray for our country and it's leaders!!!!
unfortunately the ression is likely to force more lower income right into the jaws of preditory lenders.
I see it more as a twofold problem: people are not spending because everyday, companies are laying off people - so, you can't spend what you don't have. And/or, the hype has really opened the eyes of people who were drowning iin debt even before the hype. If nothing else, probably for the first time in ages, people are aware of their financial "house".
It's a Catch-22...because we need to spend in order to kick-start the economy, but over-spending is what got us into this mess. I'm very frugal, so I haven't been buying less, but I have been donating more than usual to my favorite charities because I know they're hurting because donations are down. I encourage anyone who can afford it to give a little more to charities this year if possible.
Perhaps now would be a great time to preach the lessons that our grandparents taught way back when and we've seemed to ignore... If you don't have the money for it right now (can you pay cash if you had to?) then you can't afford it. Other than a mortgage (and even that is debatable, I guess), most of us would be in a lot better position if we only purchased what we had the money for! I'm one of the only people I know (in real life...not including people I meet online) that has NEVER owed money on a car. Why? I don't want a car payment... I drive what I can pay cash for with saved money!
I totally agree although many Americans have had some financial set backs the majority of us are still making the same amount of money and with gas prices falling are sitting in a pretty good spot. All of the media hype is hurting our economy more. It is irresponsible for the media to use scare tactics to sell papers or get ratings. We need to keep the economy healthy and to scale way back on spending is not the way to do so.
I completely agree with "dlbenn". As consumers, we have to continue to spend or things will just get worse. We should go about our normal business---with prudence, of course- but, not assume that the "end of the world" is here!
All of the "fear talk" is prompting consumers to stop spending. Ours is a consumer-driven economy, so if we continue to hide, the economy will only get worse. The best thing each of us can do is to go out and buy something. That's a critical message that is getting lost in all the dire warnings.