Home > Personal Finance > Money-Wise Advice For a Down Economy Such as This

I am very excited to hear phrases I have not heard in a long time. As a matter of fact, I haven't really heard of while I'm in America. "I can't buy it now, I think I will have to save a little more first, No - it's a little out of my budget right now". No is a word that had almost disappeared from the American vocabulary for a while and I'm glad it's back.

The Closet by Design salesperson mentioned it to me several months back as I shared with her that I wasn't ready to spend $4,000 in a closet. She said many of her clients told her that they wanted to save a little more first. So, gone are the days (at least it feels like it) that people are not buying on credit like they used to.

3 tips for money tips in this down economy:

1. Save cash
Build a strong cash reserve. As job unemployment is not stable and with most Americans not having enough savings to tide them through a period of unemployment, you should begin to work on a tighter budget than normal and save the rest. Eat out less, cut out unnecessarily coffee runs and see if you can live without your super upgraded ESPN sports TV package. Prepare for the storm to come.

It is advisable to save 3 - 6 months of living expenses. Depending on your marketability of your employment field, you may prefer to save 6 months or more. Personally, my business sits on a 12-month reserves of business expenses and another 6-months of operating expenses.

2. Retirement and long-term savings
Although the economy and the stock market are down, I look at it as a buying opportunity, especially when there is over 20-30 years of investment time. After saving enough, you might want to max out your retirement savings. Dollar-cost averaging will be to your advantage.

3. Buy your first home or Move up in house
After you built a comfortable cash reserve and done your homework in retirement investments, it is time to consider purchasing your first home or move up in house. Like the stock market, the housing market has suffered, including the Frisco TX real estate and its surrounding cities. Speaking in somewhat of a generalization, some of the Frisco TX homes that are currently priced very attractively would have sold for more, sometimes 10-20% more. Short sales and bank-owned foreclosures seem to be the market movers.

Consult with a local real estate professional to walk you through other important first time homeownership you ought to know. Please take advantage of the  First Time Home Buyers $8,000 Tax Credit given by the federal government in effort to stimulate the housing market. Read more about the FAQs of Frisco TX First Time Home Buyers $8,000 Tax Credit here.

Moving up in house is another way to capitalize in a down economy if you are financially prepared for it. Although you may not get as much as you would like in your current home, your appreciation in equity sits in your move-up house. Read about The Move Up Home Buyer Strategy while understanding realistic Pricing From The Beginning may serve your objectives well right from the get go.

Again, speak to a local real estate professional to works in your turf.
 

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