2009 - The year of living dangerously

Welcome to 2009. It’s been a long time coming. We’ll be hearing a lot more about it in the years ahead.

Many sites concentrate on the US, or Euro zone, and to a lesser extent Asia. I’m one of them, but I thought I would start this year by concentrating on Australia New Zealand, and looking at where I feel we are heading.

I’ll start by saying that this isn’t the time to stop doing things. Most businesses will feel the pinch, the most obvious exceptions being insolvency accountants and lawyers. Local councils are unlikely to feel it too much, simply because they have lived in a bubble for so long they don’t know how to pop it. Lower rates anyone? Unlikely.

My list of outright predictions follows, but here is what I think many readers will want to consider for the next year or so.

Firstly, let’s start with your money. Look after it. You earned it and you should be doing everything possible to keep other people from getting it. You may very well need all of it in the year(s) ahead.

Don’t put it anywhere where risk is unacceptably high. If someone is offering inflated interest, there’s a reason for that. They are a higher risk, and to obtain funds from clients need to offer higher rates. They are riskier for a reason. Use your head.

Secondly, I see no reason to pay retail for anything discretionary. TV’s, books, CD’s, appliances – anything of that nature should be negotiable, for a while at least. Don’t be fooled into thinking the ticket price is the sales price. If they claim it is, smile, turn around, and walk out the door. You’ll get it cheaper somewhere else.

Thirdly, sit your children down (or husband or wife), and tell them that this year is going to be different. There will be no huge handouts for toys and games, and they will have to start making their own fun (there’s a novelty). If you were to sit down and work out last year’s discretionary spend on stuff you neither need nor want or use, you may be surprised at how much of your money has gone “PHOOF” into the financial ether.

It’s a very good year to teach your children the basic concepts of financial literacy.

Fourthly, if you’re overweight or just plain fat (like I am) then you might consider that you have prepaid much of your 2009 food bill. Use it. Poncy dishes can be horribly expensive to make at home, let alone buy in a restaurant. Saving dollars is a good thing. Food will probably inflate markedly this year. Spend well. Grow some of your own. It’s fun.

Lastly, look after your job. No matter what anyone says, it is not secure. It doesn’t really matter how good you are – just how cheap you are to get rid of, or whether you are a constant annoyance to your superiors. See post “Gen Y Employment in 2009”

It’s to be a very tough year, with few exceptions, and a lot of financial pain to come.

If you get through this year with positive returns, I think you will have done well.

But most of all, enjoy the summer.