Fast Forward to October 2008!
As you all may have noticed, this blog has been on a tiny bit of hiatus since around the July time! Well, I’m a new writer currently on top of this, so we’re back! Hooray!
Let me first start by saying that I’m fairly sure everyone has been following this current financial crisis. Students, especially, are feeling the brunt of this situation. I am currently a student myself who has just went through the joys of attempting to get a student loan for the first time, and let me tell you, it was a complete pain in the butt! So I understand the situation for all of you college students out there, and even for people who are just trying to find a safe financial point for their families. Soooo to get you all up to speed, read on!
One of the big things that originally pushed us to this point was the sub-prime lending. If you aren’t sure what sub-prime lending is, it’s when companies extend loans to families or individuals, at an adjustable low interest rate for an extended period of years. The idea behind this is that people who so-so credit, not established credit, or bad credit can still get a house loan and pay it over a long (small chunk) their life. It may be an exciting time in your life until… your adjustable interest rate rises to almost 4 times your normal number, and you suddenly find yourself scrambling to making ends meet. Enter foreclosure, stage left. So as you can see, this was something that has been going on for a long time. People were put under false pretenses and now we are paying a major price. With all the foreclosures currently going on, big investment firms being investigated for shady practices and loan companies trying to take an arm, a leg and your first born child… I think it’s time to say things are getting difficult. If you’re curious about reading more on sub-prime lending, please go over to this wonderful link- http://current.com/items/89124784_mortgage_crisis_blues
Now that we’re past THAT wonderful subject matter, we can look into the current situation of the stock market. It’s been fluctuating like crazy lately and we all have a stake in what is going on. Whether it be because our parents have a 401k, maybe our college fund is in a COD, or maybe our loans are through smaller banks who are having trouble staying afloat amidst all this. Everybody is affected and it’s nothing to feel bad about. There is one thing you cannot do however. Do not take your money out of the bank. I know, I know, it’s a tough suggestion to follow, but let me break this down for you. When we have money sitting in the bank, it’s what the bank “borrows” from us to give out other loans, which keeps currency flowing as well as keeps interest rates down. But when people act frantically and start pulling their money out of the banks in times of crisis, suddenly the banks are peering around the corners of their empty vaults going… “who the heck are we going to borrow money from for these loans?” aaaaaaaand say hello to a credit freeze. I can’t stress enough how important it is that we all keep our money in the banks!
So what is the best plan of attack? In the next few posts I write, I’ll be going into some ideas on how students can save and invest money, banks they can use that have free checking accounts, as well as rehashing each presidential candidate’s tax plans and campaigns. You only have 24 days left to make your decision… I’ll be right there behind you to keep you informed! This post was just a warm-up, so pardon the fact that I didn’t hone in on one particular topic yet. I’m just getting my feet wet!
So I hope you get used to me being here because I have a lot of exciting financial information coming up!! =)
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