Have You Recovered Yet

The recession began in 2008 and many Americans are still feeling the effects and have not recovered. Some Americans are in denial about their financial situation, some refuse to take action, some don’t know what to do, some are paralyzed by fear and some believe that this is how life should be. Stop those negative feelings and take action to transform your life. If you have not recovered from the effects of the recession in 2008 ask yourself why by using the 5 why method. Ask yourself Why 5 times to find the real reason why your situation has not improved.

Don’t let people or situations prevent you from achieving your goals. You are the only one preventing you from being successful. To be successful you have to think as a successful person which means eliminating negative beliefs and reinforcing them with positive ones. There are several options available to achieve this; pray, mediate, take yoga, read motivational books, read affirmations or attend support groups.

The unemployment rate has fallen to 8.3%. According to US News Americans are saving 3.5% of their salary which is fair but we need to save more. In 1973, Americans saved 11% of their salary and in 2009 Americans saved 8% of their salary. If finances are a big part of your recovery you may need to downsize or downgrade your lifestyle. If you drive a luxury car that costs $30,000 or more you need to downsize. If pay a mortgage payment that will cause you to lose your home if you are behind 2 or more payments, you need to downsize. If you are living paycheck to paycheck you need to downsize. Trade in your car for a cheaper one. Sell your home for a cheaper one or refinance to lower the interest rate and monthly payment.

Here are 10 things you need to do to recover financially and survive any financial crisis. Create a financial kit or action plan that includes the following:

1. Do you have a list of all of your creditors, the total amount of debt owed to each, their contact information, your minimum monthly payment and the due date.
2. Do you have a savings account or emergency fund with enough to cover your monthly expenses for 9-12 months?
3. Do you have health, life and disability insurance?
4. Do you have adequate homeowner’s insurance? Does it include flood and earthquake damage?
5. Do you have adequate car insurance, full coverage if you have children or a family?
6. Do have a financial backup plan? How will you pay your bills if you: lose your job, get sick, lose a spouse to death, get divorced, have another child, lose your health benefits, get reduced work hours, lose your home, etc.
7. Do you have any assets? Create a list of all of your assets and determine their worth, you may be able to sell them if you have a financial setback.
8. Are you saving enough for retirement? You should have a minimum of $1,000,000 saved by retirement age. More if you want to maintain the same lifestyle you have now. Save at least 10% of your monthly income towards retirement.
9. Keep at least one credit card open with a balance of 10% or less of the credit limit. Get current on any late payments. Use your credit card for emergencies only.
10. Determine your net worth each year. Identify all of your debt and subtract any assets, any money left over is your net worth. If your net worth is a negative value that is a sign you are spending more money than you should.