by Jaynee Sasso
Have you experienced a divorce, bankruptcy, foreclosure, or overwhelming debt? Then you are not alone. Many families today find themselves in what seems to be a losing battle. The effects of rising energy cost, college tuition, and just the overall cost of living is enough to drive anyone straight to the “poor” house – if they are not careful. Becoming more proactive in your finances is the best way to fight back during these challenging times. The current economic crisis has revealed that too many have attempted to take a shortcut toward achieving financial success. Many families have been struggling to make ends meet long before the economic meltdown. The average person spends more time planning their summer vacation than they do planning their financial future. Money is a very emotional subject, which is why people tend to shy away from the very thought of balancing their checkbooks. If you plan to overcome the current economic crisis you must be willing to face your challenges head on and avoid the temptation of burying your head in the sand.
A full recovery will require patience and discipline, as well as your total participation and commitment. Unfortunately, the American culture has abandoned this old fashioned advice. We live in a microwave society and we want what we want now! The reality of the situation is that there are no quick fixes for either our global or personal economic woes.
The first step in financial recovery is: Admit that you have a problem, and then assess the damage. Ask yourself the question, are you making the best financial decisions to facilitate long term success? Let me emphasize, I am not only referring to how much money you contribute to your 401K or IRA. I am also suggesting that you reevaluate the choices you make in your everyday lives. For example, many people have made the choice to go on a vacation without first meeting all their financial obligations, or to purchase a designer handbag that is on sale because they couldn’t resist the opportunity to save a few bucks even though they did not pay their monthly credit card bills. Developing better money management skills is not easy because old habits die hard. But it is an essential part of rebuilding your financial future.
The way that you develop patience and discipline is: Get control over your emotions. Yes, you may be experiencing a hard time, and yes you may be suffering greatly but don’t allow that to justify irresponsible behavior. Your ability to recognize when your emotions are driving your decision process requires that you be real with yourself. For example, are you buying those shoes out of true “need” or are you buying them because you want to make yourself feel better?
The third step is: Learn the principle of delayed gratification. You must learn to tell yourself “No, not today.” You can find less expensive ways to fill your emotional void. Don’t allow your emotions to get you into debt or cause you to ignore your finances. You can only avoid your financial monster for so long before it begins to infiltrate every area of your life. This will only lead to a cycle of frustration, anxiety and depression.
If you want to make an honest effort in becoming more pro-active in your finances then you must do the following:
- Develop a vision for your life. What does your life look like once you’ve achieved financial success?
- Get control over your emotions by creating boundaries. Learn how to create an effective working budget.
- Rebuild your credit. Check your report for inaccuracies, and begin to establish good credit by possibly establishing a new credit line or just learning to pay your monthly bills on time.
- Take time out of your “busy” schedule to deal with your finances. You should never be too busy to open up the mail, balance the checking account, or track your expenses.
Jaynee Sasso is the founder and president of Faithful Assistants Inc., an online financial empowerment center. Email questions and comments to firstname.lastname@example.org. Visit www.FaithfulAssistants.com