managing personal finance

Managing Your Personal Finances Like a Pro

It is one thing to find yourself in a precarious financial situation.

It is quite another to go bobsledding into the aforementioned situation.

Far too many Americans, this author included, find themselves in dire straits, not because of circumstances beyond their control, but rather circumstances that loudly announced their approach but were soundly ignored.

You would think that financial responsibility would be a common sense matter, namely, spend less than you earn, and always make sure to have a few dollars saved up for unforeseen circumstances.

But nooooo, all too often, we cave in to impulse buying, paying little attention to our credit balance, and before we know it, we are staring down a mountain of debt that would make even Sir Edmund Hillary shake in his boots.

Financial planners are famous for advising that we keep six to eight months’ worth of expenses in our savings.

I don’t know of ANYONE who keeps that kind of cash in reserve.

So we have to opt for Plan B, which is to head off potential problems before they can strike.

Good feelings don’t cut it.

How many times have you had a good feeling about a financial decision only to have it come back and bite you?

I certainly did, in the form of a timeshare bought nearly 20 years ago that I am still paying annual maintenance fees on to this day.

Take the time and do your homework and research before jumping in the pool with both feet.

Don’t trust advice…. most people giving you advice are selling something.

I’m in the process of buying a house and my agent tends to go along with what I say.

I find myself talking ME down from a given property or payment.

He has his best interests at heart and that is understandable.

Don’t fall for quick lines or sugary promises without figuring out whether or not it works for YOU.

Buy now… pay later.

With “no money down and no payments for a year” options out there, people are prone to jump on expensive items, assuming they will be in a position to pay for them in a year when the creditors come calling.

If the recent economy has proven anything, it is that nothing is forever. Your job could be gone tomorrow and you could still be looking for one when the note on that 60″ LCD TV comes due.

Don’t jump on bargains like this unless you are absolutely sure you can pay off the item before the interest rates kick in.

Be prepared for the worst.

Living paycheck to paycheck is the worst thing you can do because it leaves no cushion for the unexpected.

Always put a little aside each payday for emergencies. If you have to pull some of it out, replace it as soon as possible.

Creating this cushion may mean going without for a while, but when the bottom drops out, you’ll be glad you did.

When the worst does come, be ready to give up certain luxuries.

Cell phones, nice cars, etc, are very nice, but when times get tough, $10 cell phones are available at Wal-Mart and a $4000 sled will drive just as well as a Bentley when it comes to getting you where you want to go.

Learn the concept of being content.

As the song says, it’s not about getting what you want; it’s about wanting what you’ve got.

When you have mastered the art of being content, things such as impulse buys or reckless financial decisions will have no hold over you.

I remember seeing a woman on TV following the 2008 Presidential election, elatedly screaming that she would no longer have to worry about paying her mortgage or putting gas in her car.

I find myself wondering where that woman is today and if she harbors the same zest and zeal.

Putting faith in government programs to improve your financial situation is much like wishing the best of luck to the navigator of the TITANIC.

This country has survived bad government and bad Presidents through the will and ingenuity of the American people. Take charge of your financial future.

So listen to your gut, and learn to recognize the warning signs and red flags of financial ruin while there is still time to change course.

You’ll be surprised at just how much you are capable of doing well.