Oct 18, 2008

The opposite of crisis

Norway's government is bailing out Norwegian banks, or at least helping them reduce their losses. The front pages of Bergen's two newspapers have been telling me since the summer that the real estate market now sucks. I am following an Icelandic woman's blog and getting emotional about her problems and Iceland's. It's hard work not getting caught up in the energy, but I find myself doing so, and need to step back and look at the reality.

I was wondering what the opposite of "crisis" is. That word is getting used a lot now. I was surprised to discover that "crisis" did not originally mean a bad event, but a decision or moment of decision. There is no direct opposite to "crisis" but there is to "decision": Indecision. This suggests to me that whatever the crisis is (as described by either dictionary or local newspaper), it is a time to choose. It is a time to decide. It is a time to act.

A crisis is not a tangible thing, but more a point in time, something that spurs us into reevaluating our future. So many are looking at the future with fear and worry. It seems to me that making a decision to lessen that fear and worry would also lessen the crisis.

Me, I am fine. Unlike a lot of single people in Norway, I can easily afford my home, with it's now small mortgage. The interest rate can go wherever it wants; I can keep up. Lately, though, I have been playing around with some personal finance software, wanting to set up a budget. There are some things I want to do: I want to buy some expensive DVD-sets (the entire Star Trek: TOS, for example), I love shopping for music on iTunes Store (such an addiction), and I've discovered that my mortgage runs until 2021. I don't have the patience for that. I want to pay it off sooner. And there are some other things to save money for (like new a stove and bathroom) So, I want to take a good look at where my money is going and see if I can't do everything I want, when I want. That is a decision I am making, but it is no crisis.

I am a very lucky woman, and this blog post is really my way of saying I am grateful for my good finances and for my home.

10 comments:

Vikingisson said...

Found you via the mentioned Iceland Weather Report blog. I like this post, it is as good an analysis of crisis as I've seen. With the root word not being exactly the current meaning it is interesting that the opposite word is very appropriate and spot on.

Indeed it is time to decide. Politicians will use the word 'change' which is code for 'change to me so that everything else can be the same' (or at least the current path we're on). I'm convinced that we're at a time that real change is required but only if the people themselves decide that course. A vote is not the only choice we must make. Nothing will change except for the things that have already changed without our interests in mind.

But we must start now or we won't know what we want. The 'kool aid' of our times has so many drunk and manipulated. Before it's too late...

Sravana said...

Bravo, Keera - great post.
re: the 'crisis' - I read something the other day after the 600 point drop in the DOW that said: okay, 12 more days to DOW zero. Of course, that's *not* going to happen. People are going to start buying stuff (at fire-sale prices), even though we are going into a recession (so they say). In fact, I was ready to buy into a stock mutual fund the other day, until I realized that they had closed it to new investors in January. Bother!

re: paying down your mortgage - just make extra payments that are tagged to 'principal', and you can pay it off much quicker. Great that you don't have an ARM - those completely suck.

Keera Ann Fox said...

Welcome, Vikingsson! I've seen your comments at Alda's. I'm glad you like my post. I am hoping for some change that goes beyond merely rescuing banks. I think many people have been focused on the material/consumerism for too long. This may be a necessary wake-up call.

Thank you, Sravana! /me takes a bow. It's good that people participate in the economy again, because money must flow. BTW, I do have an ARM mortgage, but it is so small (less than USD 10,000 with current exchange rate) and my monthly payments are so small (under USD 120) that any fluctuations in the interest rate hardly register. Since I'm on automatic deduction, I have to contact my bank if I want to make a bigger/different payment. First, let me get my budget together. Then I'll see what would be a good next move.

Tom said...

Keera - I went through a very similar process a couple of years ago and completely redid my budget. Like Sravana (what a beautiful name!), I was going to strongly suggest paying a little extra each month on your mortgage, even an extra $20 or $30 a month can take years off your mortgage although you have such a small principle perhaps it's not worth doing it that way. My own aim was to shortern my 30-year mortgage to 20-years and save several tens of thousands of dollars in the long run - so far it's going well.

As for ARMs, they don't always suck but often they're not a good idea. I have one and I'm lucky - it was five years fixed and then 25 variable. Since the rate became variable over 5 years ago I've always paid less per month compared to the first five years. But that's because the US has had low interest rates for several years now. People with sub-prime mortgages, however, are in a real mess now.

Good luck with the budget - it's really worth the time (and money) getting it right. Don't forget, though, to have enough cash to enjoy your life now as well!

Keera Ann Fox said...

Hi, Tom! My ARM was acquired over 20 years ago when the interest rate became even higher than it is now, and I started paying it off immediately, so it's never been a problem.

I have plenty of cash to enjoy. In fact, I don't even have to budget for annual bills but can pay them with a regular paycheck when they show up. So I imagine there is some money to spare that I could make better/other use of, hence the budget.

Sparkling Red said...

I have been having a feeling lately that this "crisis" will, in the long run, lead us to a better state than we were in before it happened. Fingers crossed that my intuition is accurate!

Keera Ann Fox said...

Fingers crossed, Spark! I trust your intuition.

Alda said...

Keera, glad to hear that things are balanced and (relatively) serene in your part of the Nordics. I like your take on 'crisis' - put that way it doesn't seem quite so panic-inducing.

Keera Ann Fox said...

Nice to see you here, Alda! I have seen first-hand the good that come out of getting a chance to dig oneself out of a hole. My employer is now a rock-solid company, and though it's no fun to lose on investments, we don't depend on them, like we did 20 years ago and then went bankrupt. It's about focusing on what matters and taking everything else as a bonus.

The crisis (should there ever be one) hasn't really hit Norway, yet Norway wants to bail out its banks. Preventing panic is good. What isn't, is that Norway's bank bail-out turns out to be tailor-made for only one bank (i.e. only one qualifies for help), and that bank was notified in advance about the deal. Our prime minister had to do some (rather successful, IMO) ducking and swerving on the news last night. He's friends with said bank's CEO.

Who knows what comedy act will appear next. I'm starting to be rather relieved that my bank is headquartered in Sweden.

Global Samba said...

cool post. Thanks for sharing