The crisis and your cash

Global recession, doom and gloom, wadda wadda. It all gets a bit samey after a while. Yes there is a crisis on, yes it is the biggest financial news for fifty years, yes it does tend to drag on a bit. However as boring as it may be now is an opportune time to get yourself financially fit so when the market comes back up again you will be ready to take advantage. So what can you do?

• Use a budget planner
• Get a savings account
• Invest in real things

There may be scope for change in the way the financial system works given the crisis but at the end of the day real change is unlikely and even though this is a massive crash it is part of a cycle that has been going on for years. This is not likely to change and what is most probable is that the financial system will stay much the way it is and continue to work the way it does. So it becomes imperative to understand what your money does.

Planning a budget enables you to know exactly what you can afford, a savings account is a way for you to trap value for later. A savings account may not pay the best interest but it is a hedge against inflation and pays better than money under the mattress. Savings accounts also allow you to harness the power of compound interest. Real things, are in a nutshell, real things so rather than put all the spare value you can scrape together into a paper based instrument (which caused this crisis) rather buy something real, like gold or diamonds. Real things last forever and are much less dependent on market vagaries.