It’s amazing what a slumping economy can do for the nation. When everybody is pushed to their financial limit, they reduce their spending and start to act more prudently in regards to their income. They spend less, and try to pay the debts that matter to them first. Of course, this happens only after seriously trying to keep as much of their expensive possessions and maintain a luxury lifestyle, but it all comes with the attitude that they need to get serious about what they’re doing for themselves in order to survive and prosper.
This is great for instilling a sense of hard work and reward, and for giving people perspective on the issue of handling money. However, for as many painful lessons that are taught during hardship, just as many are forgotten when things pick up again. People start spending more, enjoying better things, going out to eat more often, driving frequently, and before you know it, with several years of this sort of activity, the economy reaches a peak and tapers off until it starts to grind to a crawl again.
The reason? Living beyond your means.
This is a natural tendency of the debt-based system our economy is based on. It’s not an inherently terrible design; however, you have to know the difference between good debt and bad debt, and the things you learn now while struggling with the economy teaches you that. More importantly, you have to keep close to your heart the fundamental principles that are associated with the behavior you’re forced to adapt when your credit has run dry and you have no money saved and all your income goes towards debt.
You have to realize that you don’t need to own everything you can’t immediately afford. If you’re in possession of vehicles that are too expensive to maintain, then get rid of them by trading them in or selling them altogether. If your house is really too much for your family needs and you spend exorbitant fees just keeping it running and in good shape, then consider moving into a smaller home.
Those are big choices, but there are smaller ones you can make as well. You can pull together your bills and look at them directly and cut out all the expenses that are unnecessary. If you subscribe to magazines and don’t read them, then cancel the subscription. Same with any recurring service. If you get too much of something you hardly use, such as satellite or cable television premium channels, reduce them. Learn to do things on your own around the house. If you can physically do it, mow your own lawn and take care of the landscape and housework yourself. These things, when done on your own, can save you a tremendous amount of money.
The point is that whatever it is you learn to do during this time should stick with you for life. Learn to control your debt now and reduce your spending, and when things pick up again, maintain your behavior of living within your means and put the money you will invariably save into the bank or invest it. This will return to you like a glorious reward for living a hard-earned and responsible lifestyle.
Tags: debt
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Another good article from you. Hope people are reading your writing as it would really help them achieve financial independence. Yes, a responsible lifestyle is what all of us need. Nothing of this keeping up with the Jonesses. What’s the use of keeping up with them when at the end you will be miserably in debt?
Evelyn Guzman
Debt Challenger