How to Take Advantage of This Zombie Economy


It has already been almost four years since the beginning of the Great Depression in 2008 and the economic reports do not seem to get more encouraging. Actually for a while we were feeling hopeful that a recovery is well on its way when towards the end of 2011 and into the first quarter of 2012 unemployment figures were lower, more jobs were added and home prices were slightly rising. The revival was however short-lived when in the second quarter of 2012 the growth rate of the economy slowed down again and the number of jobs added in June was only 80,000 after 77,000 added in May and 68,000 in June making the second quarter the worst in two years.

It’s discouraging, to say the least and it feels like the US economy is moving in a slow zombie like state.

With interest rates at all time lows, companies holding back on hiring and low consumer confidence, is all hope dead? Not quite.

Experts expect things to pick up after the election. And until then there are ways to take advantage of the zombie like economy and revive your financial health. You can even profit from the recession.

Take advantage of the historically low interest rates – this is probably the most obvious one as low interest rates equal cheap loans.
            Refinance your home mortgage – If you haven’t already done so, get in touch with your current lender or shop around for the best combination of rates and costs of refinancing. If currently the rate on your loan is higher than 4.5% and you are able to qualify for a refinance at 4% or lower, take advantage of the savings. Do not forget to calculate the total cost of the refinance and compare that to the monthly savings so you can estimate how long it would take to recoup the cost of the refinance. A few hundred dollars a month can go a long way. Recently, I stumbled upon this blog post which discusses How Often Should You Refinance Your Primary Home Mortgage? It makes some excellent points.
            Repay your credit card debts faster – Very often credit card rates are variable and based on Prime plus a certain percentage depending on your credit score. Since the Prime rate is at an all times low of 3.25%, chances are your variable credit rates are as low as they can be meaning the more you repay every month, the more you pay towards principal. Aim at paying more than the minimum payment.

Also, if you have above average credit, you are probably seeing quite a few zero percent transfer offers from credit card companies. Take advantage of those offers by transferring higher rate credit card balances but be disciplined and know the date by which the accounts need to be repaid before the interest rate defaults back to a high rate. Just make sure you do not add more debts.

Take advantage of deals – weak consumer confidence and low consumer spending is not helping corporate profits as more Americans prefer to save any disposable income or repay debt. Desperate companies are trying to lure consumers by offering significant discounts. Of course, refrain from spending just because prices are low but if there was something you need to buy, be patient and wait for the right deal.

If you have subscribed to discount websites like Groupon and LivingSocial, take advantage of the deals they offer. Just make sure you do not fall prey of the “how fun” mentality when you receive the daily emails. Do you really need that pottery class or bungee jump lesson? Even if they come at a 60% discount.

Most importantly, if you are in the market for a new car, home electronics, appliances or any major items that you really need, chances are if you do your research, shop around and are patient enough to find the best deal, you will able to take advantage of significant discounts.

Take advantage of distressed properties – It is quite unfortunate that there are so many foreclosures out there but if you are on the market for a home, now may be a great time to buy. Whether you are looking at a foreclosure, a fixer upper or a regular sale, chances are you will get a great deal. Historically low property prices coupled with unprecedented low interest rates make becoming a property owner very attractive. Plus you will take advantage of the tax deductable mortgage interest. Just remember that you do not have to borrow the maximum amount a bank qualifies you for.

So even in this zombie like economy there are ways to revive your financial health. What are you doing to take advantage of this economy?


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