October Financial Fitness Challenge--Get Ready for Recession Redux
It's possible that only ice cream fans and George Costanza think a double dip is a good idea.
When you hear the term lately, it refers to the possibility that we're entering—or are already in—round two of the Great Recession. And there's no question that the recovery has been less than robust.
Economists define a double dip as GDP (gross domestic product) growth going negative after only a few quarters of positive growth following a recession. And it's unfortunate that even the fear of such a dreaded slide can become a self-fulfilling prophecy, as consumers and businesses rein in their spending because of their anxiety about the economy.
Some observers think we're already at that stage or heading for it; so far, they are in the minority. And those of us who don't study economics that closely really don't care what the experts think. We're showing signs—in weak consumer confidence numbers and parallel slow spending—that we're playing it safe. And that of course is slowing the recovery that began, technically, in June 2009.
Size up your situation
Many consumers have made big changes since the original recession began in December 2007. We paid off debt, saved more money, and added new debt more slowly.
Examine the progress you've made. Are you better able to face a double dip, or in worse shape than before the initial recession?
You might not have achieved all your financial goals during the recession; that's been hard to do for even the best money managers. But you can feel more secure going into a double dip if you've made genuine progress.
Make course correction
If you're one of the fortunate few with strong credit, healthy short- and long-term savings, and secure income, go ahead and stimulate the economy. You and others like you will end up pulling us out of these tough times...eventually.
But if your financial position is not as solid as you'd like, redouble your efforts to stabilize. Again, it really doesn't matter if the economy dips or climbs in coming months. Your strategy either way is to put yourself and your family in the strongest possible position. Here are some tactics to consider:
One more observation: Don't pay too much attention to financial news. You can't change it, and tracking it can make you ill with worry. If you are setting your goals and consistently working toward achieving them, you're doing all you can do. And you're not in this alone.
Financial Fitness Challenge
You already have the perfect partner for achieving financial success. The people at your credit union are serious about helping you achieve and maintain financial health. They bring you this website and other tools to help you make the most of your financial resources. The Financial Fitness Challenge continues to look at ways you can make better financial habits no matter what condition the economy is in.
Each month we randomly select five winners to receive $50 Visa gift cards; we choose each month's winners only from that month's entries, so enter often. Remember to register for the Financial Fitness Challenge.
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