While the worst part of the recession may have passed, the truth is that the American economy is still in deep trouble. Thousands lost their jobs, houses, cars and are still struggling to recover financially and economically. However, I wonder how many of them truly learned a lesson. For many, this recession came out of nowhere and there is no guarantee that it may not happen again soon. Then, did we learn anything in this recession that we can use in future to our benefit? This is the question that we should be asking ourselves at this stage.
So what should be done? I believe that the first thing that Americans should do is get out of the habit of depending on credit cards. Why is it that we like to carry 2-4 credit cards from different banks in our wallets and purses? Why is it that we have no shame in spending money that we don’t have? If you have money (cash…not credit) then go ahead and shop all you want but don’t go out shopping when you have no money. Would you really be happy watching TV on a plasma TV knowing that the bank paid for it and that you will be in debt until you pay them back?
Americans have to change the way they look at debt. They have to change their attitude about buying products when they have no money. The reason why the average American man was hit so hard when recession began and unemployment rates soar is that Americans had too much debt accumulated that needed to be paid back. And without any source of income, it became extremely difficult to do so. They couldn’t pay their mortgage payments, credit card bills, telephone bills, car payments etc.
Moreover, Americans need to start saving. Yes, saving. If the American citizens had some kind of saving, then the recession wouldn’t have had such drastic impact on their lives. Couple months of unemployment would have been difficult but not so miserable. I know so many people that have no problem living their lives from one paycheck to another. It’s almost impossible for them to spend any money or pay any bills without first getting their paycheck. And the money that’s left every month after paying the bills, rent and tuition fees doesn’t go to savings but instead in buying products that they can do without. What is this immediate need of having the most sophisticated cell phone, getting the biggest LCD TV (even if there is not much space in the small one bed room apartment that they live in) and a car when public transportation will do just fine? One should always have some sort of savings so that when bed times come (any yes they always do), there is some sort of back up plan.
If you want to avoid getting hit hard again by a recession, then learn something from this one. Learn to stop accumulating debt and start saving for a bright future.