8 Ways The Economic Crisis Can Be Good For You


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Times are tough out there.  The economy is at the forefront of the news every day.  Companies that were believed to be stalwarts are turning out to be broke.  Many are saying this is the worst the economy as been since the Great Depression.  Is there a silver lining to this economy?!? Yes.

8 Ways The Economic Crisis Can Be Good For You:

  • Lower House Prices and Lower Mortgage Rates – If you don’t already own a home now may be a great time to buy one!  Housing prices have been dropping.  The bloated home prices of the past few years are finally reversing.  If your finances are sound and you can make the payments you might find yourself with a house bargain.  Add to that dropping mortgage rates and this might be the time to buy if you’ve been waiting but couldn’t afford it before.  If you have a variable rate mortgage it could be the right time to lock in your rate.  Mortgages are already low so you figure they have to go up eventually!
  • Buying A New Car – If you have been in the market for a new car then now is a great time to buy!  The big three American car makers are hurting and are basically giving their cars away at cost just to keep their inventory moving.  To compete, foreign car makers are offering deals as well.  Most companies are offering 0% interest for qualified buyers.  That’s a free loan o buy their car.
  • Sales – Just like the car manufacturers many other companies and stores are hurting and are doing whatever they can to sell their products.  Forecast are already low on consumer spending for the holidays.  This means we’re going to see some great sales coming up.  Don’t go out spending just because prices are low but if there was something you were going to get anyway this coming season may be the time to buy it.
  • Low Credit Card RatesLower credit card rates doesn’t mean you should go on a spending spree!  But if you are carrying debt ad making your payments you may be able to negotiate a lower rate with your credit card company.  If your rate is already low you still might be able to find a card offering 0% to transfer your balance to.  Remember, the point is to shrink your debt not increase it!
  • Change Bad Spending Habits – What does it take to break out of the cycle of spending and debt?!?  If this bad economy doesn’t convince you that carrying a lot of debt is bad then what will?  Cash is king in any economy but wen you have a cushion for yourself then bad economies are less stressful.  Let what you see in the news be an eye opener for you if your spending habits aren’t so great.  Make a commitment to put yourself in charge of your finances!
  • Cut the Corporate Fat – Only the strong will survive in this economy (well, except for those that get bailed out).  The companies that come through this will end up with a stronger presence in their industries.  Also, as inefficient companies close up shop they leave open room for newer, smaller companies to take up the market void left over.
  • Cheap Gas – I just filled up the tank on our mini van and it cost us $35.  That would have given us a half tank earlier in the Summer.  Man does it feel good to not pay so much for gas!  One way to take advantage of this is take what the gas would have cost you in the summer and put the difference in what you pay now into a savings account every time you fill up.  Home fuel costs will also be lower this Winter than last Winter.
  • Stocks Are Cheaper – Prices have dropped to where if you invested at the turn of the century you might just have the same amount now; basically a zero return.  Not so good if you’ve lost a lot in stocks but if your starting out investing you could be getting stocks and funds near the bottom when prices are low.  You still need to do your research to find good funds and companies.  If you’re dollar cost averaging your investments you’re getting more stock for your dollar these days.

It’s scary to hear economic news these days.  But if your finances are in good shape then now can be a good time for you!  If your finances aren’t then get working on it now!

What do you think?  What other ways could this bad economy be good for you?

photo credit: kekremsi

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Published or updated May 24, 2013.

Comments

  1. Loving this post! It is true that right now there are many opportunities, if you know where to look (and have the credit score in some places). I’ve been saying that now is a good time to INCREASE my retirement account contributions. However, not all credit card rates are low: Citi is jacking up its rates across the board.

    Miranda’s last blog post..Black Friday and Consumer Spending

  2. Very good points. I have added some money to our investments and I love the cheaper gas. I’ll also try to take advantage of some of these sales for the Christmas season.

    Patrick’s last blog post..Weekly Roundup – Thanksgiving Edition

  3. > “Most companies are offering 0% interest for qualified buyers. That’s a free loan to buy their car.”

    I see a lot of people touting this, but is it really that great a deal?

    My wife and I are looking to buy a minivan in the next month or so, and there is a pretty big difference between new and used. 0% is great, but not if I have to pay $6,000+ more for it. Besides the increased payments, the amount that will carry interest when the rate resets is going to by much higher as well. Of course, if I had the cash to buy it outright, it’d be great to borrow the money at 0% and buy a CD with the cash that would come due before the interest rate reset, but alas, not for me this time around… great post though! ;-)

  4. My husband and I had been wanting to purchase an LCD television for many months, and we purchased one a couple weeks ago for an incredible price due to stores slashing prices (and got a larger one than we would have likely been able to afford several months ago). Like you said, it’s not a great idea to go nuts and buy a ton of stuff for the heck of it, but my husband and I had been planning on getting a new TV at some point anyway, and thankfully we were able to get a good deal because we were patient and waited for the right time to buy…plus, it gave us a lot of time to research different TVs and make an informed decision rather than buying impulsively!

    Hannah’s last blog post..Illy Espresso Memberships

  5. Call be Scrooge but I really think not getting into more debt or taking on credit is the smartest route to take in any economic situation, crisis or not. ;)

  6. Glen Craig says:

    @ Joe – The debate of new vs used is entirely different. If you were looking to get a new car then now is a great time. And you have to consider that interest rates are higher for a used car loan. I understand why a used car is a great value. There’s probably great deals on used now as well as dealers want to move their inventory. You might find great deals from individuals as well as some may need to sell their cars for financial reason. As for the interest rate resetting, I’m not sure that applies to cars like it does o credit cars. With a car loan you have the interest rate for the life of the loan. Some companies are offering 0% for five years! If you are disciplined and were going to get the car and pay it off in 3 years then you could take the 5 year loan and put the difference in savings or a CD.

    @Squawkfox – Taking on debt usually isn’t a good idea, true.

  7. @ FFB,

    OK, you have me intrigued on the non-reset aspect. I will have to look into that. As for the new vs. old being different discussions, I totally agree. I didn’t mean to suggest that you were implying they weren’t, but many people don’t think about the total cost or amount they’re borrowing. All too many people look only at the interest rate or monthly payments.

  8. Excellent article. This is also a great time to buy gold, while it’s still cheap.

  9. Change Bad Spending Habits, period. In good times you’ll manage to survive basically no matter what you do. But in bad times you must change you deal with money.
    The fact is that only a tiny minority is NOT making enough to have a decent living. It’s this buying hysteria which causes all the problems. The problems are always on the cost side and not on the income side.

  10. Glen Craig says:

    @ Yogi – So true. Many of us have not to get by but it’s giving in to our wants that keeps us in the red.

  11. You can definitely get great deals on cars and homes right now. It is a perfect time to buy assuming you are financially prepared.

    Also, it is nice to see that gasoline is on sale for 50% off! I had the same experience as you when I filled up my F-150 recently.

  12. Glen Craig says:

    @ Jeff – Wouldn’t it be great if there was a way to lock in low gas rates for your car?

  13. @ FFB,

    There was a company offering something like what you suggest:

    http://simpledebtfreefinance.com/lock-in-your-gas-price-with-mygallons/

    It wasn’t worth it at the time I wrote the post, since prices were already hitting their highs.
    Another catch is the fee structure means prices have to really take off for it to be cost effective, but if we get another turn around in oil prices it might actually become worth it!

  14. Glen Craig says:

    @ Joe – Interesting.

  15. Thanks for this article – it is nice to see that the credit crunch is actually good for us in some ways! :)

    Love the blog, going to add you to Google Reader!

  16. I’ve actually taken up stocks since I am not invested in it yet. It does seem like the best opportunity to do so, although I wish I had more money to invest…

  17. @ Alberto – Just remember, even though prices are down they can still go down further and there are always risks. (Though I wish I had some extra money to invest too!)

  18. Yeah, it’s great for anybody who has no fear of losing a job. Who is in good health with no specter of losing medical insurance. Who is not due to retire in the next 10-15 years. Who doesn’t have to sell the house that is now valued less than the mortgage unexpectedly due to a job relocation.

    Sorry for sounding snarky. Usually I’m quite the contrarian, but these days, I’m a little more sensitive to the plight of those who got caught in the crossfire.

    On the other hand, I have noticed the interest rate on my home equity loan is WAY down. I guess that’s good for me.

    • No doubt the current economic climate is horrible for many! I feel for anyone who is hurting these days. But for some, who are in a good position financially, this period can be full of great opportunities.

  19. Nice guidelines.. Actually all statement are correct specially “Low Credit Card Rates – Lower credit card rates doesn’t mean you should go on a spending spree! But if you are carrying debt ad making your payments you may be able to negotiate a lower rate with your credit card company. If your rate is already low you still might be able to find a card offering 0% to transfer your balance to. Remember, the point is to shrink your debt not increase it!”

  20. you really have to watch those “special deals” they may sound great at first but looking at them closer you usually see something you really do not like. There are huge opportunities available during a recession. I know a guy who went to all of the Circuit Cities in town and cut a deal with the managers to buy up a lot of their stock at massive discounts. He is now selling all of it on eBay. At a certain point if you are prepared there will be fantastic opportunities in real estate and stocks. you just have to be prepared to take advantage of them.

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