We have gone through a year that has wreaked havoc on our lives.  A mortgage crisis that has foreclosures up 18% that last year, breakdown of our largest investment firms, and  a banking industry that is in disarray.  Our government has been bailing out companies at one time thought to be the towers of power;  GM, Ford, Citibank and Bank of America, and of course AIG, to name a few.  Historic unemployment with nearly five million neighbors out of work with a very slim job market. Once profitable retailers like Circuit City, Fortunoff, and Lines N Things are now out of business or in re-organization.  There is a slowdown in consumer spending due to the loss of savings funds and  the lack of   job security of many bread winners in the work force.  The loss of over 40% of our investments, including  retirement, children’s college funds and and overall savings plans will take many years, if ever, to recoup.  What is the next shoe to drop?

Does everyone remember how we have paid for luxury items, vacations, holidays, gifts, and oh yeah, grocery over the past 25 years.  If you guest credit, you get a gold star (Good news, gold is selling very high right now!).

What do You owe?

Consumer credit outstanding in the U.S., as of  March, stood at over 2.5 trillion dollars.  This number does not include mortgages, only consumer credit.  With so many families struggling, small companies trying to survive, and large corporations looking for cost cutting measures every day, there will be many people unable to keep up with the bills.

Credit is one of the first items to go unpaid in this environment.  Mortgages, utilities and the necessities are payment priorities.  It is always smart to have a plan in place for the worst of times, but sadly, many people do not, or are running out of their emergency funds.

The key right now is saving in every possible area you can.  Look at your daily spending habits and find ways to save dollars.  The dollars add up and help you get through the current economic crisis.   look at your entire financial picture to discover other ways to save.  Things will get better, it will be easier on those who sacrifice now and learn the harsh lesson taught by these times:  Have a financial plan, stick to that plan and don’t get fooled again.