By Ron Dorner
“It is not good for a person to be without knowledge, and he who makes haste with his feet errs.” (Proverbs 19:2)
Great changes are taking place in the U.S. economy. Each of us will be affected. The financial decisions you make in the near term could be devastating if not thought through carefully.
Most important is that you should get good counsel prior to making any financial decision. It is amazing how many people decide to cash out of something or buy an item without considering the consequences.
You may be asking “to whom do I go to for counsel?” If you have not sought professional financial advice before, this can be a daunting task. Approach all financial matters with prayer. God has the same intense concern over how we handle our finances as He does about our daily walk with Him. Check with others in your church about their experiences with financial counselors.
Most people’s net worth will shrink in the months ahead. Your dollar will buy less at the market. Your savings will earn less. The value of your home may decrease. Credit will become harder to obtain, and taxes will probably increase. Cash becomes more important in a scenario like that.
Many will have a window of opportunity in 2008, 2009, and 2010 to avoid some taxes. If your adjusted gross income is modest during these years you will be able to sell assets with little or no capital gains tax.
With the increase in the cost of gasoline, now is the time to make adjustments to living with higher gasoline prices. Think creatively. It may be possible for you to make money on higher gas prices. You may be able to develop a new business which helps people cut their gasoline consumption by using the car less.
If you have not done so before, now is the time to live on a budget. You will be much better prepared to know how much groceries are going up, what it really costs to operate a car, etc. Because of the uncertainty of the months ahead, you should set aside funds for emergencies. If you haven’t done so, living on a budget will enable you to set money aside for such a fund.
Remember that old saying when you come to a railroad crossing – stop, look, and listen? That idea is good when you are ready to make financial changes. Stop and pray. Look for good counsel. Listen and act accordingly.
I believe we are in for a long period of economic changes that will stress the average person’s finances. We must think differently about our jobs, assets, and how we spend our money.
As I view the United States economy, I have the distinct impression that we are over the peak and starting the downhill slide. I have long encouraged people to be ready by living conservatively and setting money aside. If what I see is true, many who have not prepared will have difficult times. Once again I urge you – take a careful look at what is going on and prepare for the future.
Ron Dorner is director of Biblical Money Management. BMM has been helping believers handle their finances and estate planning since 1984. Online counseling is available at www.BiblicalMoneyManagement.com.