Why am I concerned about the economy? This country has a debt problem from government to individuals. If we do not slow down and pay attention to how and where we spend money, the whole system could fall apart.

As I always talk about financial self-care, I wanted to reiterate why it matters today. Financial change is happening everywhere, not just with the banks. You can only control your part of the world but first learn what is happening and why that is more important than ever.

Here is what I am paying attention to with trepidation:

1. Car loans are rampant with over 30% of people financing a car

People cannot afford transportation costs. Given some may be buying more car than they can afford, but this is ridiculous to have so much debt out there for a depreciating asset. In addition, a greater number of people are defaulting on their car loans.

2. Credit card balances are high

On average people have over $5,000 in credit card debt, worse, defaults are on the rise.

3. Savings are depleted

Remember all we were saving during lockdown? Those accounts are dwindling.

4. Commercial office buildings mortgages delinquencies rise

With work from home movement and other changes, the rate is around 5% this year.

5. Traditional measures

Employment looks strong, and inflation is stable by many reports; These positive measures are critical to a budding economy. I believe they cannot stand alone without other financial factors which matter to each of us individually.

6. Rising interest rates

The interest rate changes are affecting businesses and consumers on the loan side. Sure, savers gain but see my list, # 3 above.

7. Debt ceiling compromise was a temporary fix

This issue will come to the forefront after the next election, or sooner. Right now, the astronomical amount is easy to understand by calculating per US citizen is close to $7,100 each.

8. War in Ukraine

A country I am humbled to admit I couldn’t have found on the world map a decade ago is now in splinters and affecting global stability and peace.

Something is going to give. Perhaps in the long run all will be well. In the meantime, being prepared to ride out the fiscal downside is crucial.

I am not chicken little saying “The Sky is Falling” rather …

Instead, I’m encouraging living by the Girl Scout model of “Be Prepared.”

You have heard it before from me many times. This attitude is a product of my Girl Scout years and career. Stay financially sound with these five ways to be prepared for the unforeseen whether flooding, fires or economic downturns:

Five Steps to Maintain Your Prosperity Preparation:

1. Create a safety savings.

2. Live on less than you make.

3. Check and cross check your insurance coverage.

4. Be Prepared for downsides financially and with an estate plan.

5. Enjoy the upside by living in the simple pleasures and appreciating what you have today.

Whatever you do, do not take money out of your long-term goal, like retirement, to fund your life now. That will backfire in the long run, leaving you with less to live on in your older years.

Balance is key.

When you have the downside contingencies taken care of, you will be prepared for the worst. Then, you truly will be comfortable appreciating and savoring the best.

Looking to read more about what the economy is doing? Here are some resources:

Subprime car loan delinquencies are surging (axios.com)