Economy getting worse. Consumer-related companies are having more sales than ever to promote consumer spendings. People become attracted to the cheap stuff and start to buy. Some buy without considering whether they need it, or if they can afford it. In the end, the amount they need to pay for their credit cards becomes shockingly large. Some will fail to pay. Banks end up in big trouble since many people cannot pay their bills and loans.

At the end of the day, the consumer-related companies earn the most. Those people who cannot pay will have to return their homes/cars to the banks, and some even forced to declare bankrupt. And when people cannot pay, the banks will not gain any benefits. They will start losing money if this continues. True, they can take back those cars and real estates, and resell them but they can only resell them at a much lower price. And reselling does not mean there will surely be a buyer. Those cars and real estates might stay with the banks for quite a while due to the poor economy.

In my opinion, I think all these started from the point when consumers (us) start to spend money like water and buy things which they cannot afford, and even borrow loans which they cannot pay (and the banks approve loans without thinking twice. Few months ago, the banks were competing fiercely with each other to get more people to apply for house and car loans. When competition is that fierce, the banks will become more linear when it comes to approving those loans).

So how serious is this?

Frankly speaking, I have a feeling that our country is actually undergoing such a situation, albeit in an early phase. True, encouraging people to spend more will certainly boost the economy since it improves consumer spending. But it does not take away the fact that people ARE getting poorer with the high inflation rate (and companies ARE doing badly due to the bad economy. Do bear in mind that not all companies are involved in consumer business..that’s why there is a possibility of job cuts).

I think perhaps it’s time for people to start being frugal and be prepared. And I do hope that Malaysia will not end up like US, though my gut feel is telling me our country is indeed heading towards that direction (maybe not as bad).

Last but not least, good luck to us all.

I talked about Few ways to survive the incoming recession just 2 days ago. But I realized I’ve actually missed out few important things. I’ll talk about those missing points here.

Avoid using credit card

It’s pretty hard for you to keep track of your credit card debt when you’re outside. That’s why always try to avoid shopping with your credit card unless it’s really necessary. The next thing you want is to sign too much and unable to pay, which will bring us to the following point.

Pay your debts on time

Always remember to pay your debts. Always ensure you have enough money to pay all of them including your loans and credit card bill. Failure to do so will cause you to pay extra $$$ in terms of penalty, which is totally unnecessary.

Don’t make unnecessary mistakes

Drive slowly and don’t exceed speed limit, don’t overtake at double-lined road, don’t park illegally, etc. All these can be avoided if you are careful enough. There’s no point to pay few hundred bucks for these silly mistakes. Avoid them at all cost.

Sell off your unneeded stuff

Similarly, you can set up your very own yard sales. Sell all those things that you no longer have use of on eBay or garage sales, etc. They will help you to earn some money.

Know your rights as a tax payer and employee

Certain companies provide the employees with benefits such as optical and dental. Always remember to check those out and fully utilize them. Also, know your rights as a tax payer. What can you claim and what you cannot claim. For example, buying books is a good investment and you can also get tax relief from that.

Plan your trip

Getting up earlier before the morning rush hour, and going back home after evening rush hour will definitely help you save up some fuel cost. Also, plan where you are going before you start your journey because if you end up lost, your car will surely burn up more petrol than necessary.

For now, I cannot think of anything else. Hahhaa. Do let me know if you can think of something which I have not listed here.

Enjoy!