Economy Meltdown and Effect On Commoners

Meltdown? Or financial adjustment? That's what happens when we print money out of thin air and extend credit to those who can't pay it back.

We deserve it!

Uncontrolled borrowing and spending, property over valued, credit cards used as a form of cash.

Thirty years of this and "we" expect for an overnight fix. I don't think so!

Accepting the recession trend is the easiest way to rationalize the pay cuts. The liquidity crunch and low capital is the reason for stalling new expansions or diversifications in various fields. People believe in spending less and also lower their expenses. For a company maintaining the break even point is becoming difficult and hence they have resorted to retrenchment. Another trend that is seen is pay cuts and depriving the benefit of bonus.

For a commoner recession comes with low salaries. With ad hoc family expenses, fixed spending like school fees, commuting and other vital needs the commoner is surely facing a problem. Curtailing expenditure would mean to alter the lifestyle of the family. This is a slow process but again not a difficult one. Fixed savings need to be adhered too as the future also signals that the recession spell is here to stay till the next year or more.

Seeking other means of income is almost wiped off as everywhere people are trying to manage with existing skills and manpower. The commoner has to provide for daily expenses and increasing demands of entertainment and compulsory academic needs of children. Adjustments are seen in the weekend outings, discontinuing the services of domestic helpers, cutting the visits to malls or splurging on the special wardrobe. A treat remains special now and eating outside can be well controlled by savoring home food.

Medical expenses are generally ad hoc in nature and hence it is prudent to provide for emergency situations. Financial personal planning has to be done meticulously with certain fixed expenses in mind and also trimming frivolous spends. A monthly or rather weekly budget would seem necessary. The effect of economic meltdown does have a stabilizing effect as the expenses of fixed nature cannot be reduced and hence people usually accept to change their lifestyle.

There are fewer trends in commoners indulging in parties or splurging on gifts during festive occasions. The rise in cosmetics is also making it difficult for ladies to go in for latest trends in this sphere. The membership to clubs and fitness centers is also seeing an all time low as this is also an area of cost control by the commoner. The rising costs of vegetables and grocery items are also a cause of grievance for the common man.

What we call it “Global Financial Meltdown” or “Global Economy Meltdown”, there is always one keyword – "Global". It's sad that because there is too much greed in the American financial world, and too little regulation, the whole World has to suffer. Even countries that were careful how they handle money and credit are now looking forward to stormy days.

(Resource : Compilation from Some Internet articles)