How You Can Help Fix Our Economy

Our economy is broken. “Yeah yeah, I know” you say… “we’re in a recession.” But that’s not what I’m talking about. I’m talking about the broken economy that led to the recession, and all recessions. Recessions occur when spending declines. Basically, there isn’t enough demand to keep production at a high enough level to keep a decent number of people employed. Now, think about credit. Why do we have credit? So we can continue to spend even if we don’t really have the money. Credit is to keep our economy going.

But why do we need credit when our unemployment rates are low? Because our economy is broken, that’s why. Our system is set up so that the prices that consumers pay mostly goes to the top echelons of our society. Basically, our economy is set up so that the rich get richer. While the majority of people are paid a less-than-living wage, or live above their means through credit, the rich get richer, and the rest of us become slaves to credit, all to keep the system going to feed the money beasts at the top. “Yeah yeah, I’ve heard all this before” you say.

So, what can we as individuals do? Well, as an individual, not much. It’s individuals as a collective that can make a difference. We need to stop making up for poor wages through credit. I know that this will be hard, hard for a lot of people. But I think that if enough of us can live debt free, and those that can’t can at least trim the fat from their budgets that they can, we may have a shot at change. If we refuse to use credit, our system will have to change. Minimum wages will have to change to living wages, prices will have to come into line with actual value, and the money will have to be more evenly distributed in order to keep the new economy running.

Now, this may be asking a lot. But I think that we can do this if we really try. It’s the beginning of the year, and most people have made some sort of resolution, why not make a resolution to balance your budget? If you don’t know where to start, here are some tools for you.

If you don’t believe me on how broken our system is, pick up a copy of The Return Of Depression Economics And The Crisis Of 2008 by Paul Krugman

For some good advice on where to go from there in balancing your budget pick up Suze Orman's 2009 Action Plan by Suze Orman (if it’s before Thursday January 15th 2008 you can get it for free here: http://www.oprah.com/article/oprahshow/20081119_tows_bookdownload if it’s not, spend the 10 dollars! It’s worth it)

Use this tool on Suze Orman’s website to create a budget for yourself: http://www.suzeorman.com/2009actionplan/expensesheet/index.html

If you have credit cards, use this calculator to tell you how to get them paid down: http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp

After you’ve done all that, I suggest you get something to help you keep to your new resolution. If you don’t already have a financial program, I suggest you get one such as Microsoft Money, or QuickBooks (I personally like MS Money). There are also free programs on the internet such as www.justthrive.com and www.mint.com. If you choose an online program be sure you check the security credentials of the site to make sure your information is secure. If you’re nervous about entering your information into these sites or programs, you can rest assured that as long as they have the proper credentials, your information is safe. I also suggest that you take advantage of your bank’s online banking if you don’t already do so. Keeping track of your money, and keeping an eye on your finances on a regular basis will help you to know where your money is going and keep it from straying from your new budget.