No cash, no purchase

I watched The Suze Orman Show on CNBC over the weekend and the host emphasized on some sound spending habits that everyone should adopt for a recession.  I blogged on some similar points recently too.  Basically the show mentioned that it’s time to kick out the old spending and financial habits, and bring in new ones.

No cash, no purchase

Spend with what cash you have on hand instead of conveniently charging all your purchases through your credit cards.  Buying on credit during times of credit crunch is likely to snowball credit card debt excessively, especially if you are the type who doesn’t have a habit of paying up all your monthly credit card bills in full.

Always pay up all your monthly credit card bills in full

This is self-explanatory.  A rising number of credit card holders are now heavily in debt because they keep paying the minimum sum only on their credit card bills each month.  They also roll over debt from one credit card to another one etc. 

These spenders had been pampering themselves with the luxuries that are originally catered to the affluent people during the recent boom years.  Hopefully these spenders are now focusing on massive reductions in unncessary spendings and using whatever cash they have to clear off all their credit card debts.

New spending habits

In short, don’t spend money that we haven’t earned yet.  Also spend within our means at all times, whether it is during boom or recession times.  If everyone had practised these simple personal finance, the currrent financial mess won’t had became so bad.  I pray that the bear will go away faster than estimated by the economists. 

In the meanwhile, you stay safe with your hard-earned money and find a compromise to still enjoy collecting toys.