Everyday you hear of companies laying off thousands of jobs. Last month itself there was some half a million job loss in the US alone. With these tough times coupled with a job loss and credit crunch, it is all the more important that we have a good financial planning.

What is Credit Crunch? Banks are not lending money as they used to earlier. They have become strict in the sense they look twice at a person before making any lending decision. Loans are not easy to get as they were earlier. What lead to this credit crunch? Some banks lent money to people with bad credit. Not only that, they also lent huge amounts to people with good credit even though there were not eligible for such huge credits. This lead to defaults and finally foreclosures.

So, during these tough times one should be prudent in spending i.e spend on only those items which are absolutely necessary and postpone purchasing the big ticket items. But yes, there are people who are spend thrift and want to buy everything they see and MAX OUT their Credit Cards. One more thing here, I don’t see any reason for people to have 8-10 credit cards. I say, ONE is more than enough. Transfer balances from high interest rate Credit Cards to a lower one interest rate Card and destroy all those high interest Cards. There are low interest cards, I have one which is only Prime plus 1.9%. You need to shop around.

For those people who are maxed out and have a bad credit, this is the time to fasten your seat belts and bring in some Financial Prudence into your lives. It’s not so hard, open a Retirement Savings Account or a Savings Plan for your kid(s) and setup an automatic fund transfer into these accounts every month from your chequeing account. You will not know the burden. One fine day you will wake up to see you have some money to rely on during your retirement or for that matter to send your kid(s) to college.

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Independent writer and Internet Marketeer. My website : http://www.smash-marketing.com