Thoughts On Finance

Everyone understands that finances are tight and therefore many people are cutting back.  This does not necessarily mean to not buy presents for people but to be wise in what you buy.  Don’t overspend and try to keep gift giving simple.

In the past, I have always overextended for Christmas, coming out of the day in a hole and then spending most of January trying to get out of it.  I really thought that was normal, but this year, I stuck to a budget, and I can honestly say that I feel better going into Christmas than ever before.  I know that I still have a dime left and that I will be in good financial shape in the New Year.

People tend to over spend at Christmas, so that they can give to others, however, I can honestly say that I would not want a gift from anyone who was putting themselves in a hole to come up with a present for me.  I would much prefer a card or some cookies instead.  That would make me happier, and I am sure that no one on your list wants you to go into hock, just to present a cool present to them at the holidays.

Do yourself a favor, limit the gift giving to simple things, and what you will find is that you will enjoy the holidays much more than you ever have before.  I know I will.

FDIC insurance is what our banks supposedly have to cover our money in case the bank that you have your money in goes under.  This insurance used to cover up to $100,000 per account and has recently been extended to cover up to $250,000 per account and if your money is in a non-interest bearing account, all the money that you have in an account is supposedly covered according to the new FDIC rules effective until December 2009.  Investment and finance expert Suze Orman has been on TV of late for commercials regarding the new FDIC online evaluator, that allows you to check and make sure that your money is insured.  My real question to all is, if this system were to crash, would our government really be able to cover all of the money that every single person in the US has in the bank? And the answer in my opinion is NO WAY! Take a moment and think about the movie “It’s a Wonderful Life”.  In that movie, when people got wind of the bank’s problems they all ran to the bank to withdraw all their money at once and very quickly they knew they were in trouble.  How do you think that our government would handle such a crisis? Do you think that they could just explain to people that their money was invested in their neighbor’s homes and farms? I think not.  So is it a good idea to keep all your money in the banking system? I suggest not.  I am not saying to withdraw every penny, however, it may be a more advisable to begin to save some cash on hand, just in case.  I mean with the stock market so iffy, and the potential that banks and real estate could crash and no credit available, isn’t it possible that you could be left without a dime.  I think it is not only possible, but perhaps likely.  In any case, it is not meant to scare people, but to take note of where your money is and who has the control over it.  It is actually ironic that we are allowing the Federal Government full control over our personal finances, especially since they seem to be such prudent financial wizards, don’t you think?