Everyday, I watch the stock market go up and down like a yo-yo and think to myself that we need to get back to basics. When the economy stumbles, it is not the time to freeze up and hide. Rather, it is a time to plan for how to take advantage of the inevitable up-swing. Certainly, this involves market up-swings, but it is also personal as well. It is time to lay the ground work for being an adult in our society. My advice, take care of business when times are rough. Think of it like a New Year’s resolution for your wallet. Use the tough economic times to take stock of what matters and take care of business.
- Budget, Budget, Budget: Take a look at your expected take home pay and your outlays for things you need. Rank your needs. Early in my marriage, my husband sat me down to talk about spending. He did not yell or be anything other than pleasant. He just asked me questions like “What do you think about water? Should we pay the water bill? I like water,” he said, “you can cook with it, drink it, and a shower is a good thing. I think we should keep the water flowing. What do you think?” I still laugh thinking about how he went through the electric, the gas, the car, the insurance. You get the idea.
So what are your needs? Clearly, shelter, utilities, food and insurance rank right up there. Make sure you include money for the future and money to spend for clothing and essentials. What about taking the trip of a lifetime? Wouldn’t you rather go on a fabulous vacation that than eat fast food every day? It all takes planning, budgeting and saving. If you find budgeting over-whelming, spend some time with a CPA or a good financial planner. They love doing this stuff.
My advice, think about your priorities and put your money to work on the things you think are important first.
- Spend, Spend, Spend: Once you get familiar with your budget, it is time to spend money. Don’t get me wrong, I am not advocating running around buying everything in sight. I think that we, as a country, seem to have the concept of spending backwards. We spend money freely on frivolous items, but we do not spend it on things to make our lives better.
For example, the newest gadget from the Apple Store may have been on your Christmas list, but wouldn’t it be nice to start this year off knowing that your future is secure? How about spending some money on your future by paying off a bill? Or how about hiring a financial advisor or CPA to get on financial track? Maybe you have been putting off incorporating your business or drafting a will? Have you looked at the tires on your car? What about preventative break maintenance? What are you putting off that is for your own good?
My advice, spend your money where it will do you some long-term good. Treat yourself like a person of worth and take care of business first.
- Plan, Plan, Plan: Do you think about short term and long-term goals? If your household is similar to mine, you may be getting caught up in juggling work, kid’s activities, and family matters. What do you want to do this year, next year, five years from now, ten years down the line? What would happen to your family if you died or got sick? Do you have a plan in place for their future? Think about aspirations, goals, money and dreams. Think big and plan big!
Get going on your dreams. You may not have tomorrow. So, what if you do not attain your goal? The time will still pass. If your goal is to be debt free in two years, you may wake up two years from now still in debt. But you may have less debt and be closer to your end goal. Think of everything you want to accomplish in this life. Divide that list into groups: things you can do today, things you need to work on tomorrow, and things that will take time and planning.
My advice, dream a little every day and revisit those dreams often.
I like to watch old movies just to see how people lived. The expectation of what is normal is incredible. Although the movies do not show everyday luxuries that we enjoy, people seemed to live better than we do. By budgeting money, spending wisely and planning for the future, our lives would be much better. Why not use economic downturn and these cold winter months as a time to regroup and rethink the person you are, from the wallet on out. If you look at this as the opportunity it is, you might be surprised and what some good old fashioned reflection can do for you.