Dow 6800

Don't even turn on the news this morning if you're heavily invested in the US stock market ... unless you're the kind of investor who looks forward to getting angry, becoming depressed or both.

My personal opinion is things will keep getting worse, too.

______________

There aren't many liveaboards here at the marina, because most boat owners own boats for recreational purposes on weekends.  So we're already talking about a very small sampling pool.

But within that group there's two men on my dock who've lost their careers as a result of the current economic turmoil, plus one more who lives on the dock adjoining.  We're talking about three divorced middle-aged men, with families and children to support, who got no warning at all that their livelihood was about to abruptly evaporate.

I can describe the look on their faces in one word: shock.  And if the stunned expression subsided after a week, the disbelief still showed through in their eyes.  I saw something else, too.  Now, instead of hurrying down the dock in the morning on their way to work, their postures ebbed into a slouching drag that seems unacquainted with either focus or direction.

I don't even know their last names but that didn't prevent any of them from stopping me on the dock, shaking their heads after sharing the bad news and asking, "What am I gonna do?"  They were so desperate to hear of a solution that they were willing to seek answers from a (imperfect) stranger.

There's probably six liveaboards on my dock ... which works out to about a 33% casualty rate.  I feel sure there's many, many more staying under the gossip radar.

My personal opinion is that things are gonna get worse, too.

--  --  --

Joe Sangl is the Pastor of Financial Planning at New Spring Church: here's two recent posts from Joe's blog that are more relevant than ever ...

jsangl on 24 Feb 2009

What To Do When You Are In A HUGE Financial Mess

I have met a ton of people who are experiencing the harshness of the following two key items:

• No Plan, No Savings, Piles of Debt
• Loss/Reduction of Income

Here is what you can do when faced with this situation.

1. Cry.  It is OK to be regretful for awhile!
2. Take time to prioritize who will get paid and who will not get paid.  (Read the post I wrote HERE about priority order.)
3. Write out your goals.  Make sure they are SMART.
4. Prepare a written spending plan (even if you know that it will not balance to Exactly Zero).  This will allow you to fully understand your "Go Get This!" number.
5. Take ACTION!

There can be a tendency to just focus on #1 and hope for everything to just work itself out.  Usually, this is not the case.  Recovering from this type of issue is emotional and gut-wrenching, but it requires one to take action.

You CAN recover from the mess! 

Help! I Can't Pay My Bills. & Seriesjsangl on 12 Nov 2008 01:00 am

Help! I Can’t Pay My Bills. Part 3

This is a series written for those who are struggling mightily with their finances and tough decisions are being made about who will be paid and who will not be paid.  It is my hope that this series will provide practical steps that can be taken to walk out of this situation and into financial freedom.

Part 3  Prioritize

When the financial sky is falling down and the walls are closing in on you, it is imperative that spending is prioritized.  Here is my suggested order of priority for spending when there just is not enough to pay everything.

1. Housing  Must take care of the mortgage and utilities first.  Now if the mortgage payment has run out of control and it is 60% of one's take home pay, then it is high time that the house be sold or income be tripled within a couple of months.
2. Food  I am going to eat before one single bill is paid!  We must be able to eat.  I am not talking about Olive Garden or fast food.  I am talking about groceries bought with coupons and much attention to frugality.
3. Transportation  If transportation is required to produce income, then it is imperative that the vehicle payments, insurance, taxes, gasoline, and maintenance be funded.
4. Back Taxes  Owing the government back taxes is a terrible thing, and it must be addressed.  I would rather owe anyone besides owing Uncle Sam!
5. Secured Debts  If there is additional money remaining after Housing, Food, and Transportation are taken care of, it is time to pay the secured debt payments.  This is debt where the lender can come take something - like a car, boat, motorcycle, tractor, etc.  If the lender repossesses the item, they will sell it at a wholesale auction and come after you for the difference.
6. Family & Friends Debts  If you owe family and friends and you still have some money left, it is essential to pay on debts owed to family and friends.  Unpaid debts to family and friends has been the cause of untold relationship issues since time began.  Avoid this!
7. Unsecured Debts  It is time to address the unsecured debts.  Credit cards, student loans, signature loans, etc.  One thing to note is that unsecured debt holders will be screaming and hollering the loudest because there is nothing they can come take from you.  As a result, they will try to play upon your emotions to get you to pay them before you pay anyone else.  And it works!  I have met with a lot of people who have kept their credit cards current while letting the house payments fall behind.  Not good!

Go back to the spending plan you have prepared and ensure that your priorities are in order.

Did you wonder why Tithing isn't on the list?

That's because like heartbeats and breathing, tithing should be reflexive; something we do automatically ...  without even wondering whether it's required or essential.