Resolutions During a Bad Economy

Posted by: Sophie H. | Dec 29,2007


This week I wrote about keeping your resolutions for the new year.  There’s a bit of conflicting information on the blog.  On the one hand, our resident mortgage analyst, Gene, is warning that 2008 could be a very down fiscal year overall.  Me, being more of an optimist, wants to say, “This is going to be the best year ever!!!”  

Who’s right?  We both are.  The fact is that because 2008 does pose to be a pretty down year for the economy, as consumers are going to be spending less, potentially leading to inflation and other problems.  Yet this is the same reason that you should get your own financial house in order.  While I recognize that having too many consumers not spending a lot is a problem for the economy, I still recommend saving and reducing debt for each and every person.  Because the economy is bound to hit a lull, saving for a rainy day becomes all the more important, as that rainy day is now upon us.  

The possible downturn in the economy (it hasn’t fully come to fruition yet, but most analysts think it’s going to happen) is further evidence that you need to save responsibly for retirement.  I’ve written about how you need to factor in inflation for retirement savings.  Even if we don’t reach the levels of the late seventies, prices are going to go up even when the economy is healthy.  Let the current economic news light a fire under you for 08 to budget effectively, pay down debt, and save for the future.

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