Surviving the Current Economic Crisis

Savvy Recession-Proof Tips

The most effective way to survive the current economic recession is to . . . re-cess your expenses, or at least shave a few dollars off where you can. Sometimes the possibilities might surprise you.

For instance, my wife and I recently discussed our life insurance policies with our agent. What got our attention was a mailed noticed that told us our policies would expire by our mid-seventies, long before we plan to! So, the conversations began.

The results? We doubled the face value of my policy, after a basic health screening process (which was done very politely, but still left me thinking I’d done something ‘criminal’ after all the questioning), without reducing my wife’s policy payout, thanks to the type of life insurance she has [far more coverage at a much lower cost than myself, by the way!]

Doesn’t sound logical so far? Well, a) she came out of all this with far more financial backing (in case my life expectancy turns out to be less than we plan), b) her policy will still pay nearly the original face value on maturity, due to cash value built into the premiums, and c) we save $300 a year by reducing her premiums and paying my increased costs out of the money we were already paying for her insurance.

Besides that, we decided to re-side our house (necessary, due to some minor water damage in the living room), install all-new windows, put on a new roof, and screen in a lower deck (after doing major work inside last year; see one of my other articles, to learn about that!)

Again, this doesn’t seem to make much sense if you want to save money. But, we’re paying for the work by increasing our line of credit at our local bank while interest rates are still low (4%), gaining a $1,500 tax credit in 2009 for energy-efficient windows, and enjoying a bonus room outdoors where we can revel in our back yard that’s full of berms, trees and flowers.

Finally, we plan to do all this despite a 9% cut in my pension funds the next three years by eating out less (the average family eats in a restaurant five times a week, surveys say), buying only essential items (like food) when they’re on sale and using money-saving coupons, while putting all our monthly expenses on a single credit card that gives us Sky Miles (we pay the full balance off each month).

As to ‘luxury’ items, we’ve left our cable service on extended basic. even though our favorite news channel is now only available through a different package for more money (we now view its programs on line the next day). This gives us time to read more books, take longer healthier walks, talk with each other about important things, and sleep well at night rather than worry about money troubles.

Sure, surviving the current economic recession is hard, but it is doable. With a little thought and smart planning, you can reap the benefits of disciplined living as well.

Happy thrifting!

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