Getting Back to Basics
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 hits rough ground 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-swing, 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.
1. 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 should you be saving and what do you need for frivolous spending? If you find budgeting over-whelming, spend some time with a CPA. They love doing this stuff.
2. Spend, Spend, Spend: 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 like water on frivolous items, but we do not spend it on things to make out 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 you are not in credit card debt? 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.
3. 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!
I like to watch old movies just to see how people lived. They may not have lived life on such a grand scale as we do, with luxury items in their daily lives, but maybe they lived better than we do. By budgeting money, spending wisely and planning for the future, our lives would be much better. Why not use this recession 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 a good old fashioned recession can do for you.