I Fought the Economy and the Economy Won

On the news recently, the local reporter covered a story in which a famous real estate speaker came to town. He presented the prediction that the housing market would continue to dive, with the worst low occurring between January and July of 2008. This is a bit depressing considering that next summer is still more than six months away. The speaker went on to convey that the real estate market has 50 years of rebounding and that real estate is a great long-term investment even though the housing market might be stagnant.

This blog entry concerns the title idea above. I fought the economy and the economy won. Just like the real estate market will eventually rebound, so will your finances. Did you lose your job? Is your house in foreclosure? Are you having trouble making the minimum payments on your credit card bills? Are you living in too much of a house? Did you have to put your kids in public school this year? Whatever the situation, the key is to learning from the overspending habits that you have practiced up until now. Use this economic time to trim your budget and rebuild it cautiously when your financial situation improves.

The truth is that the economy really hasn't won. The nation hit a bad slump in 2000 when the dot.com industry collapsed and again after 9/11. It was so bad that you may have trouble remembering it. After all, six years is a long time to forget. Many used it to start spending again, way over their means.

The hot topics on the Internet right now are about how to save your home from foreclosure, how to make money with little startup cost using an Internet business, how to save money in consumer spending, and so forth. You can use a lot of these ideas to save money in the short term. It is more important to change your spending over the long term. Will you be prepared the next time the economy slumps in 2 years, 5 years, 7 years, or 11 years?

As you get older and it gets harder to find employment after losing your job or harder to afford a house after getting foreclosed on, you will need good budgeting practices. You will especially need budgeting when you retire.