We’ve all seen the headlines about what is going on in our financial world today: Gas prices have soared in every major market,
before coming back down. The banking industry has gone through rough times. Consumer debt has exceeded $2.2 trillion. Food
prices are higher than last year.
What have we consumers done? What are we doing to change? Many consumers continue to live day by day, regardless of what is
going on in the economy and in their financial lives. Many consumers still are enjoying expensive clothes, extravagant weddings,
and new fully loaded automobiles, and purchasing the latest gadgets. Those who still are spending carelessly are in for a
rude awakening.
Consumers who are not adjusting their spending plans may be headed into deeper waters with limited survival skills or supplies.
It reminds me of "Gilligan's Island": "No phone, no lights, no motor car, not a single luxury." The castaways had to adjust
to their current situation and new environment. But as they looked back in time, they realized they had overlooked some signs
during their three-hour tour that could have prevented being deserted on the island. Many consumers are approaching the beach
of a deserted island, a land of financial debts, bad credit histories, and financial woes. A year or so ago, those same consumers
were enjoying their new homes, automobiles, clothes, and other possessions, as well as great vacations. Now the signs of the
storms are visible, as they were for the crew of the S.S. Minnow, and many consumers continue to ignore them.
Unfortunately, consumers are being shipwrecked every day. Many are making landfall at a rapid pace. However, like the castaways
who finally made it off the island in the final episode, consumers can make it off their own financial islands. Here are some
survival tips for avoiding a financial shipwreck: STOP & CONTROL YOUR SPENDING HABITS. Do not apply for any more credit cards. Do not purchase things that you really do not need. Be careful of spontaneous spending
or impulse buying. Regardless of the sale or clearance items, CONTROL your spending.
WORK TO INCREASE YOUR NET WORTH BY LOWERING AND PAYING OFF YOUR LIABILITIES. Compare your income with your monthly expenses and debt obligations. Are you meeting your monthly budget? If you are coming
up short, then it is time to make a change. Consider having a major garage sale. Check the garage, cabinets, and closets.
If you have things that you do not need or have not used in the last eight to 12 months, sell them and pay off or pay down
your debts to improve your budget and overall financial position. Review your monthly expenses and see if there are areas
that can be reduced or eliminated. For starters, question whether you need a cell phone with every imaginable feature, or
the premium channels on your cable or satellite service.
LIONEL SHIPMAN is the owner of Shipman Consulting, a personal and business finance consulting firm specializing in helping individuals and
businesses improve their financial outlooks.
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