Life Affects Us
Recently local storms have caused considerable damage to buildings and businesses. Those that have insurance worry less than those who do not but still feel some loss in money and time. Some people lose hope and beg for money. Jobs are great until you lose one. And other events can upset us as well.
Life affects us. Are you prepared for unexpected events or natural disasters?
There are many who let life affect them without a plan to recover. They depend on societal safety nets to take care of their financial crises. Granted some are without support or the ability to build their own safety net of personal assets and insurance coverage for the risks of loss. But planning must allow for the unexpected.
Work to Affect Your Life
Life can be hard. Stress will come when we ignore the fact that our quality of life depends on us and the efforts we make each day, though we do need a day of rest each week.
I have lived long enough to see a big change in the number of people who grow a garden to can vegetables to use over the winter, along with the reduction of local dairies for milk, and the restriction of raising chickens in town. Those activities require more work than most of us have time to do. So, we work to earn enough money to meet our needs at a grocery store.
When you add a family setting to the picture, lifestyle decisions can become problematic. Remember to take care of your health when you have others to care for.
The truth is that most of us need less than we think to survive.
You can create a lot of financial pressure on yourself with decisions about your residence, furnishings, and transportation. The size and number and age are key factors.
Most of us want more than we can afford. So be careful about your financial decisions. Many of those decisions are commitments that take time to absorb, usually at the cost of eliminating other items we might need.
Make good spending decisions that will help your income build a positive effect on your future.
Saving by Sacrifice
The purpose of this blog site is to help you build a better mindset for money. And building a process for saving is a major part of that mindset.
As part of that process for saving you must develop some mental controls. First, you must learn to delay purchases. Become acutely aware of the normal price. Then, look for sales or opportunities to build saving into a purchase, such as a volume buy on something you use consistently.
Second, question your potential purchase with an evaluation of value to you. Will something else work better? Do I really need that now?
Most of us are not raised to make those evaluations and sacrifices.
Until you make savings a priority you will be less likely to question your spending habits and more likely to use credit when cash is not available. You want it now!
The fact that you bothered to read this blog post tells me you have potential for doing more with your money over time than most of your neighbors!
Be Proud That You Avoid Pride
Many young professionals get caught up on how much they can buy on their salary. Nice houses, nice vehicles, nice clothes, travel, etc. are all available if you can afford the monthly mortgage, loan, or credit card payments.
That is pride talking. They want to look good since they make more than an average salary. But pride sets a trap for hardship.
Scripture notes, “Pride goes before destruction and a haughty spirit before a fall.” Proverbs 16:18.
Focusing on your own comforts can blind you to potential problems. That may include health issues, job loss, major vehicle repairs, interest increase on loans, and divorce. Hopefully, you can avoid most of these, especially divorce.
If you do not make saving a priority, these potential problems can create havoc on you financially. Control your spending to control your financial stability.
I find considerable wisdom in scripture. Another quote, “When pride comes, then comes disgrace, but with the humble is wisdom.” Proverbs 11:2. That quote supports my point. You must be humble in your spending decisions.
What can I buy to get by until I can afford better? How can I save for emergencies? What can I do to build security into my financial status?
Those are questions that can lead to a humble approach to your spending decisions.
Then, later, you can be proud that you avoided pride!
Accumulation Goes Both Ways
Accumulate good or accumulate bad. Your choice.
Will you choose to let others take your money in interest charges? Or will you allow others to use your money in return for interest income?
Will you be the borrower or the lender? Your financial stress or benefit can be that simple in scope.
Your use of credit versus your investment in savings will greatly affect your financial future.
Which would you like to do, retire at 50 or at 70? Your ability to make that decision will be measured by your spending decisions over the first 30 years of your employment.
Are you happy with your present process for making spending decisions? Are they accumulating the way you hoped?
Build a Financial Life Perspective
Start saving and investing early in life to take advantage of compounding. Spend less than you make. Learn to earn and learn to invest. And stay married to the same person, if at all possible.
That is some sound financial perspective. Does that sound like the perspective of your friends and family? If so, you can count your blessings, positive changes in your financial decisions will be supported.
If not, any money you work to save will be subject to jealousy and play on your good nature to help those around you. Change their attitude or walk away. Otherwise, they will look to you as part of their societal safety net.
I know that sounds somewhat cruel. However, for many work is a cruel reality that demands more time than they are willing to give.
Help others learn to provide for themselves. But do not let short-term help become a long-term need!
In your youth, saving just 5% of your take-home pay can seem like a big demand. And, credit is so easy to get for what you want now. The trap is set to lock you into the life-long use of credit for your needs. No sacrifice or delays required!
It will take a humble approach to your lifestyle and spending on basic needs, like housing, transportation, and groceries. And to build a savings habit.
Please note: A good savings habit will give you more options on how you will live as you get older.
By middle-age, if you live with humility, you should have debt payments, including housing and vehicles, to less than 10% of disposable income. Your savings and investments should be compounding! What percentage of debt payments will you be paying?
As you approach your senior years, thoughts of retirement will enter your plans and considerations for the future. How well did you save and invest? Did you get good advice along the way? If so, be thankful.
If not, seek out some professional help. You may feel you have little time for effective change. But two or three years of simple changes can have a dramatic effect on your finances.
Your Financial Story
You are currently writing your financial story. It is reflected in your spending in your checking account and your savings balance. Then, we look at your retirement savings for your future needs.
Consider building assets that can produce income in addition to your employment. Include stocks and bonds and rental property in your considerations. Stocks are the easiest investment option to start. However, there is a lot to know before putting your money at risk. This is an area where a good understanding of business is your best defense against loss. A good advisor will be valuable. Until then, you can use Money Markets or Bank Certificates of Deposit as a means of earning interest.
Over time, you can learn to use those assets to build an income stream that will make having a job optional!
Take care of your health. Be helpful but not used. Develop a good saving habit. And be humble in your approach to spending decisions.
Then, your financial story will be worth telling and of value to those who will listen!