What The Wall Street Crisis Means To You

The recent Wall Street Financial Market Crisis impacts every person and every company in the USA and globally.  We have not seen the end of this crisis and events of recent weeks are a precursor for things ahead.  We must all take the time to understand this crisis and rally where we can to help soften its impact.  The alternative will be much worse if we all do nothing.  Andy Hornby, Chief Executive of Halifax Bank of Scotland (HBOS) tells the BBC's Business Editor Robert Peston why he thinks the credit crunch could continue for another 18 months.

Save more

The financial market crisis translates to a squeeze in discretionary spending at the individual and family level.  This makes it harder for consumers to purchase basics like food and gas, but as it relates to the downward spiral of the financial markets, it also means that the individual consumer has less money to save.   

A bank's ability to lend is based, in large part, on the deposits it has.  The less people save, the less banks have on deposit and therefore the less banks will be able to lend.  The consumer saving and the credit crunch are absolutely linked to each other.  This circular trend lends itself to a simple truth, if consumers could take it upon themselves to change the trend and save more, then we could have a grassroots effort to reverse the course of the crisis. 

Banks like HSBC Bank are offering very high rates on their savings accounts to encourage individuals to save more.  The underlying challenge to individuals is increase their saving.  You can open one of these high-yield savings accounts online in just a few minutes.  I encourage all of you to put $100, $1,000 or even $10,000 into savings today.

U.S. Government sponsored public service programs like Feed The Pig have the mission to educate consumers to the benefits of saving their money.  The program website also includes several helpful tips for cutting spending with the implication that the reduced spending should then translate into more saving. 

Support U.S. Treasury

While Paulson presses Congress to approve the U.S. Treasury's Massive Bailout Plan, we must remember that the United States cannot afford to NOT do something.  Our Government is duty-bound to protect its citizens.  While in a crisis, it is every citizen's patriotic duty to support the U.S. Government.  While this is not a crisis of war, it is still a crisis that impacts every American.  One way every single citizen can support the U.S. Government is to purchase U.S. Treasury Securities.  Every citizen can purchase U.S. Treasury Securities online in just a few simple steps.  At the same time we are all being patriotic, we are also making a great investment.  Read how Gary Shilling of Forbes details how U.S. Treasuries have out-performed the S&P 500 for over 25 years. 

Take Action

I've detailed 2 ways that every citizen can help turn this financial crisis around.  Decide for yourself if you will help or stand on the sidelines watching the world change without your vote.  Step-up and start saving in a high-yield savings account and purchase U.S. Treasury Securities.

Comments

[Rebecca Farris]

I would have to agree with you, if people are in the right place (financially) to do that at this time. I think the biggest help anyone could do is to pay off their debt first. Consumer debt is the main cause of this crisis to begin with. People have more credit card debt, higher mortgages, and other loans than ever before. This large amount of debt is what's causing the economy to be so unstable. This is what the government is buying with the "bailout" money. If you have paid off your debts, save or invest, if not start putting your discretionary income into debt reduction first.

Rebecca Farris
Rebecca is a financial analyst that writes about entrepreneurship on her blog [Start-Up] A Better Life at http://startupabetterlife.blogspot .com

[Pamela]

Great article!! If we haven't already, we all, if small business owners, need to scale back wherever and whenever possible for self-preservation.

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