Posts Tagged ‘financial advice’

Financial fantasy peddlers hawking their wares ramp up their appeals during tough economic times. Promises of quick-and-easy cash flow, painless credit repair, and effortless wealth building have already begun to increase in numbers.

Buyer beware!

A willingness to buy into the fantasy and denial of financial realities lie at the heart of our current economic crises. No-money-down mortgages, interest-only loans, and esoteric financial products coupled with consumer over-spending and over-debting fueled by the desire to live a fantasy-based dream weakened the financial system’s foundation and has brought it to the brink of collapse.

Now the vultures hover overhead waiting to pick at the bones of financial carcasses. People desperate for relief from their financial troubles gravitate towards offers for financial peace.

Buyer beware!

Careful evaluation and deliberation rather than making impulsive decisions can serve you well. The Internet offers many opportunities for you to think before you buy if you are willing to delay your need for instant gratification.

Follow this simple method to safety:

• When considering a purchase, do a search for the name of the product or the person offering the product followed by the word “review.” Check out what others have said before making your decision. If you use Twitter, ask for feedback from your followers.
• Wait 24 to 48 hours before clicking the BUY button or making the phone call. A good sales pitch will appeal to your emotions and encourage you to “Act Now!” or risk losing some benefit. Ignore the push and wait.
• If you tend to spend impulsively, call a friend and share what you are planning on buying. Get some feedback. Never buy anything when you have that I-have-to-have-this-right-now feeling.
• Make sure that whatever you are considering online offers no-risk guarantee and if the product does not live up to your expectations, ask for a refund.

There was an interview on NPR  with a columnist from The Financial Times who pointed out that during past recessions, most people have held on to their jobs, their homes, and their income. His advice for now, be cautious but don’t panic.

I’ve spoken to a number of people in the last few weeks whose lives have mostly been affected by rising prices and/or dropping value of their investments. For many, this is combined with a general feeling of alienation from the niceties of life and the uncertainty generated by the presidential campaign. It’s difficult to feel grounded and focused.

Generally we’re in a wait and see mode, as we wait to get a glimpse of how the financial chaos is going to shake out. This is a time of caution. It’s not a good time to take great risks in either your business or personal life. Rather, it’s better to carefully consider any purchases or major moves, and if possible, wait. Unless you are faced with an emergency, wait.

It’s also a good time to plan for your future–to ask yourself what you really  what you really want to do with the next segment of your life, and spend time doing the research you need if you want to move in a new direction.

It’s also a great time to start improving your financial literacy and understanding of the financial world so when things do turn around, you’ll be ready. I know people who are poised now to buy things at bargain prices with the knowledge that they will benefit in the future.

Because times are leaner, staying in close touch with your money is a wise move. Now is the time, if you haven’t done it before, to start keeping track of your spending and earning and getting to recognize your own patterns. This is the time to cure your financial vagueness syndrome.

For a basic plan for doing these things, read my book Build Your Money Muscles. For a more advanced “course” in developing practical financial skills and overcoming issues like a not-enough or just-enough financial habit, read about Build Your Money Muscles for Financial Strength & Security.