Thursday, September 5, 2013

Your Fiscal Cliff

by Andrew Cromwell

There has been a lot of talk of late about our economy and whether or not we are in recovery or still in recession. The federal government has been pumping money into our financial system for the last five years in order to buoy our economy and prevent further financial meltdown. Meanwhile, all of this spending has been getting expensive and our government’s attempts to put our financial house in order came to a head at the beginning of this year. This “crisis” was averted by the same congress that had created it at the 11th hour by passing other legislation (which I will not begin to go into here).

It seems that our government lacks the will to make the real changes necessary for a long-term solution to the financial woes of our country. This is not surprising since our government is made up of people we elect and who represent our desires. According to a recent Gallup poll, only 30% of Americans actually budget their money and have long-term financial goals. The other 70% live without much of a plan except to survive the month.

So it should not surprise us that our political leaders don’t stand up and try to sell America on “tightening its collective financial belt”. If they did, 70% of us would scratch our heads and then go out and buy another Starbucks.

But we should not lose hope. Small changes in personal finances can equal big changes in your world. As Dave Ramsey says, “Wouldn’t it be nice to have some month at the end of your money?” When we do, we discover a new kind of confidence about the future. Even if the car breaks down or the dryer gives out, we know it is going to be okay because we have told our money where to go rather than watching it walk out the door.

The consumer mentality is pervasive in our culture. Earlier this week, I realized I was trolling the ads online just to see what was on sale in case I “needed” something. It is amazing how quickly I can discover something we don’t have that we “need.” And before I know it, I have pulled out my credit card and made the purchase. I make the same mistake when I go to Target just to walk the aisles.

Whenever I find myself a little out of control financially, I realize it’s time to get back to the basics. First, you and I must know where our money is going.  Far too often, the money slips through our fingers because we have not made a plan (a budget) and live by accident. That budget is the second thing that is NECESSARY if we are going to get our money in line. We complain all the time that our government doesn’t have a budget, and yet most of us don’t either. Something is wrong with that picture!

Third, we must plan for the future because we are going to need some money when we get there. You are going to need money for retirement. You are going to need money to help your kids during their college years. You are going to need money because life is going to happen. If you don’t have a plan, then you will always be surprised by everything.

Fourth, you must decide to be happy. Contentment is key if we are going to get a hold of our finances. If we are always unhappy with what we have, we will always be looking for ways to spend our way into happiness. The problem is, more stuff does not equal happiness, it just equals more stuff.

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