Understanding the Law
February 13, 2009
Coping with the hard times

Last week we heard from our own Eastern Caribbean Central Bank (ECCB) about our position with respect to the global economic meltdown. According to Governor Sir K. Dwight Venner, “hard data is not easy to come by, but available information would seem to suggest that there is some slowdown” in remittances. He also noted that there are some effects on foreign direct investment, which has impacted especially on the construction industry, and there are clear indications of a slow down in the tourist industry.{{more}}

The Governor promised more oversight for our financial institutions. We know that our banks are highly regulated but we still need to know about the consequences to our savings, should our banks experience difficulties. We also need to know about the status of the balance of payment. Far more information is available about the American economy than we have about our own. We do know that the FDIC insures up to $250,000 for people in the USA.

With the present economic uncertainties, we have to be prepared for any adverse effects of the global melt down.

We have to take some personal measures to protect ourselves and to keep our resources for our own use.

  •  Make sure you have some cash in hand in case our banks have a cash flow problem. Another problem comes up about where to keep this cash. We can no longer keep it under the mattress, because this traditional “save all” is known to the burglars. You would have to be innovative as you are the only one who knows your house thoroughly. Speak to your bankers about the safety of your savings.
  •  Make sure you keep your commitments. Pay your mortgage or your rent as the case might be. Make sure you have sufficient cash for at least six months. Make sure you do not lag behind as it would be harder to raise two months payment than one.
  •  Think outside the box. If you are in the buy and sell business, you would have to come up with novel ways of keeping your business afloat. You cannot afford to sink into a stalemate.
  •  Work towards reducing your electricity bill drastically. Make sure you do not have defective appliances. Place your hand against the door of the refrigerator to see if there is any escape of air. Make sure the rubber is holding properly. Reduce the use of a fan. The weather is mild at this time of the year. Look at this as a saving for the hot season. Unplug transformers when they are not in use.
  •  Reduce the use of your cell phone. Meet your friend in person. Read a book. Cell phone is a drain on your pocket. Use your land line when you are at home. Let your money remain in your pocket, not in the coffers of the phone company. We have to be thrifty to protect our resources.

Ada Johnson is a solicitor and barrister-at-law.
E-mail address is: [email protected]