Today's blog is going to be a bit different from previous ones...
So many of us are eager to "get back to normal" and are looking at the enticing ads out for new vehicles, new houses, new everything, and I feel you. I really do!
I am just as eager for things to return to "normal", and it feels like that is just an arms reach away. Unfortunately, I really don't feel that this is the end, it's only a pause, like the eye of the hurricane.
We have a brief pause, time to catch our collected breaths, but, unfortunately, we are in a financial hurricane, and we are about to be hit by the tail.
Even if Covid-19 has no further effect on us, even if we wake up tomorrow and there's a safe, effective vaccine, or they've discovered a complete cure, we are about to be hammered.
Back in March and April, an epic number of people lost their jobs. An even larger number of people started to arrange deferments on their credit cards, vehicle payments, and mortgages.
We have become a society that, instead of using credit as simply a convenience, we have become reliant on it, not only as consumers, but our entire financial system is now so reliant on consumer credit that if everyone suddenly were to pay off all of their debts - our financial system would collapse!
This is why Geoff calls our society not Capitalism, but Creditism.
We are not considered to be "living an adult life" unless we have a house, an updated car, and at least 2 or 3 credit cards. That comes along with a mortgage, a vehicle loan, and who really pays off their credit cards every month? (aside from Geoff, that is!)
Often, in order to be able to pay all of those monthly payments, we also have student loans. A standard bachelor's degree is now estimated to cost $42,600 ($94,000 with expenses), and most students end up financing, as their parents now don't have the ability to contribute much to their education.
Combine that with a lack of jobs that actually offer a livable wage, and add in a global pandemic, and you have a recipe for a financial hurricane.
It's an easy enough trap to fall into, and it's why many of us have more month than money, and end up drowning in debt. It's this realization that is why so many of us are looking to alternatives, such as being an Urban Nomad.
It's about to get much, much worse, as those deferred payments are about to come due.
So, whether you are an Urban Nomad or not, now is a good time to look at reducing your expenses as much as you can, and put as much into savings or debt reduction as you can.
For debt reduction, one method is to pick something small (like your smallest credit card, for example) and pay that off as quickly as you can. Then, you have the regular monthly payment for that account to add into what you can use to pay off the next largest account, and thus it builds.
However you do it, keep in mind that the more you are aware of your own finances, the better able you will be to both see and deal with disaster if it comes your way.
I'm sorry for the "doom and gloom" today. Recognizing potential problems is not being "pessimistic", though. It's really about being prepared and ready to deal with whatever the future holds for us.
So, time to batten down the hatches, keep your heads down, and weather the storm!
As always, come join us in reaching for the future, and getting off of the hamster wheel!