Waking up this morning, I heard the news of recent 50,000+ layoffs announced by a a few major companies (Caterpillar, Home Depot’s Expo, etc.). They reported that the current unemployment rate is at 7% and they expect it to be over 10% by the end of 2009.
It doesn’t require a PHD economist to know that when fewer people have jobs people spend less, causing businesses to make less and in turn cut jobs. The cycle then repeats itself.
Paying down debts helps us weather the storm
I have been seeing a lot of major companies going out of business lately and it concerns me. I don’t enjoy seeing businesses fail and especially when you think about all the families who are greatly impacted by it.
Even if you have no desire to get out of debt for the freedom that comes with it, cutting back on your debts will cause you to be in a stronger position to handle the inevitable challenges in our economy right now.
It’s simple math
Basically our personal finances consist of money coming in and money going out. Most of the US spends all their energy trying to increase the inflow to get it to match their outflow. As the recession/depression deepens we will see more people who suddenly lose large portions of their income and will be forced to start working on minimizing their expenses.
Joseph prepared for the recession in his day
Just like Joseph saved up 7 years for the famine that was coming (Genesis 41:17-24) we would be wise to prepare. Each credit card, car payment, or other debt we pay off minimizes our monthly outflow. I don’t know about you, but I am trying to get my monthly expenses to the lowest point possible before my income takes a hit. If my income never suffers, then I will just be in that much stronger of a position financially.
Trusting God and preparation go hand in hand
I get concerned when some Christians claim to be trusting God and use that as an excuse for not preparing for the future. Yes God is our source and provider, but we have a part to play and if we don’t do our part, we may be learning some difficult and painful lessons in the coming years.