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Thursday, February 28, 2008

Tighten Your Wallet, Prepare For The Crunch.

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You might have heard the word out:"Prepare for recession, the economic downturn is here."

Why is that so? Some say it's due to the poor-performing USA market, people are getting loans from the banks and defaulting them. Some say it's the rising oil costs, that pushes prices of other commodities up resulting in rising inflation.

What is inflation? In other words, it means that the things that you bought before costs more now. But heck, the salary is still the same! So what do you do? You start to spend more on the things that you buy, but you buy less.

When you buy less, your friendly shop owner (that was forced to rise her prices) starts to earn less money, and when she earns less money, she starts to worry about her high rental costs, thus order less goods. So less goods = less opportunity to earn more money.

This vicious cycle goes round and round affecting everyone of us. So what should we do now?

1. Buy local.

Just by buying more local products from local companies. The next time you decide to go to Carrefour to do your groceries, why not stop by your nearest wet or dry market or visit NTUC? Firstly, you could get better prices there and you are doing a part in sustaining a positive business environment for the local market stall owners. The foreign companies can take care of themselves, not to worry.

2. Leave your car behind.

That is totally very true, if every car owner can leave their car behind once every one or two days by taking public transport, the consumption of oil will significantly decrease and you can also save on your petrol costs.

3. Practise the 3Rs.

By reusing your old items and finding ways to utilize it, not only that you save money, you could also help to save the environment. (I know, saving the environment is an overused word nowadays.)

4. Buy gold.

Now I finally understand why older adults like my mum and other aunties like to buy gold. Buy them when the gold price is low and sell them when the price is high. It can also be exchanged for emergency cash in the pawnshop when you are financially tight.

5. Be positive.

Some things are beyond our control, and stop whining and worrying about how this may affect you. Being positive makes our mind clearer and sharper to prepare for the steep road ahead. You stay healthy by worrying less too.

Tighten your seat-belts and be prepared for a bumpy ride.