Debt: Why it Needs to go in This Economy

Posted By Frank

BillSavings.com Brief:

As the economy continues to weaken, removing debt is one of the best ways to protect yourself.

Unless you've been living under a rock for the past six months, you know that the economy is heading into dire straits. Jobs are being lost, home foreclosures are on the rise, etc. In a tough economic scenario like this one, it's important to take the proper steps to protect your financial well being. A recent post over at Get Rich Slowly covered why the economy could get worse and what we can do to protect ourselves in the case that it does.

There are a number of economists and financial professionals out there who truly believe that the American economy is in for even more of a downturn than most consumers expect. One such professional, Peter Schiff, is the president and Chief Global Strategist for Euro Pacific Captial. According to Mr. Schiff, there are a number of problems with the economy right now that I can definitely relate to. The U.S. Dollar is in the process of a collapse against other currencies, in large part due to the continued accrual of government debt, which he believes (I agree) is out of control. Inflation, he states, is also underreported, and is actually running at eight to ten percent annually.

Let's assume then, that Mr. Schiff is right. What can we do to protect ourselves against the coming crisis? Getting rid of debt should take a priority in this case. The reason that so many consumers find themselves unable to pay their mortgages is that they didn't plan properly or borrowed so much that even a small ripple in the economy sends them to the poor house. Don't live that close to the edge. Organize your finances and pay off high interest debt as soon as possible. In addition, brush up on your budgeting and saving techniques, as being able to lower your cost of living substantially during lean times is a valuable skill to have. You may not be able to predict where the economy will go next, but you can certainly prepare yourself in case things do continue to worsen.

Category: Debt Solutions

11/4/2008

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