The Houston area has weathered the storm of the recession well, staying afloat by having a thriving building and housing market that can create supply to meet demand, and by diversifying industries. But the area still felt the recession and is glad, along with the rest of the country that it may be at its end as many economists and government representatives have posited. While there is no official declaration yet that the recession is over, the country looks forward in hope to improvement in our lives and financial situations.
As the future approaches and the financial winter turns to a vital spring renewal, it is good to take note of ways we can stay afloat in the future - how we can manage our money is post-recession season. Here are some suggestions to help individuals and families as we move forward:
Be a Smarter Consumer
As Dave Ramsey would say, "Act Your Wage" - this means spending only the money you have to spend. During the recession many consumers found themselves facing foreclosure and carrying more debt than they could handle because they signed themselves up to spend more money than they actually had. If you are careful to watch your spending and control your expenses you will do well. Don't go back to old spending habits of buying what you can't afford by using credit or loans. Experts aren't saying to get rid of your credit cards completely, but a good rule to live by is to only purchase on a credit card if you can pay it off in full each time the bill arrives.
Beginning these new habits will help you to avoid problems the next time the economy faces a tough time.
Prepare for Emergency Situations
It is a way of life that sometimes the unexpected happens; our car breaks down, a storm blows through and tears up our house, or a family member gets sick and needs medical care, or someone in the family becomes unemployed as we've seen so clearly during the recession. But we don't have to face these situations completely unprepared. More and more Americans are putting money into savings to prepare for emergencies and to have a cushion. They are no longer spending all of their monthly income, but are putting some away for that "rainy day."
It is important to make sure you have an emergency reserve to meet short-term income needs - experts recommend saving at least six months worth of expenses. This need was all to real to many people who lost their jobs, and faced extended periods of unemployment. But unemployment is not the only unforeseen disaster that could happen, so be sure you have adequate auto, home, life and disability insurance coverage. These are areas that could cause financial loss regardless of economic conditions. It is better to be prepared, than to find yourself drowning in an unexpected situation from loss.
It is also a good idea to prepare for seasons you know are coming down the road, like retirement.
Start or Maintain Retirement Plan Contributions
During the recession many people put a hold on their retirement fund contributions so they could increase their take-home pay, but now is the time to get back into the swing of things and start saving again. If your employer offers a retirement plan you should be making regular contributions to this or an IRA, so you can support yourself when the time comes to retire. It not only provides tax advantages, it is a step in planning for your future and the protection of yourself and your family.