Living a successful life comes down to the basic choices you plan and then live out. It’s the career path you chose, the business you decided to build, the personal lifestyle you want to lead. What’s often overlooked is the connection, all these forces have with one other.
The fact remains that interdisciplinary thinking, can go a long way towards sustainability.
This might sound a tad obtuse and mundane for many. But realize the most important life decisions can be made a lot easier and more accurately, by thinking more basic, and within your capability.
Realize what operating any successful business comes down to for instance, is creating some sort of value for the consumer.
Our personal lives are all about maximizing our utility. Where the utility is about measuring our happiness or satisfaction, that’s gained or realized from being self sufficient.
Protecting Yourself In Economic Crisis
Once the media proclaims the economy is failing, most become frantic and stresses out. Worried how they can sustain their current standard of living, or realize financial freedom because of the upcoming financial crisis.
What needs to be first understood is what the word economics mean, this in terms of thinking about our own situation.
How you can benefit from it’s true definition, and then steer it to your financial advantage.
The Macro Economy Out There
Begin by just passively paying attention to what the media says, as you know it’s usually biased noise. There are usually ulterior motives about the world economy out there.
The stock market is in a roller coaster frenzy, there’s too much demand and not enough supply. Expect rapid inflation, the upcoming spiraling mortgage defaults, and the ever increasing unemployment rate.
All which eventually affects your welfare, although these are economic conditions out of your control. All you can control is the economics in your own household.
The definition of economics is the art of managing an entity to remain sustainable. In your personal life, that’s something you can control.
All you can do is manage your own household economics, especially when it comes to managing money. It’s your responsibility that your personal economics are strong and positive.
Spend Less Than More
Our parent and especially our grandparents who didn’t earn much, were conditioned to keep their spending less than what they earned. It’s been proven the fastest way to financial disaster, is spending more than you take in.
Believe it’s entirely possible to maintain your current standard of living, while cutting down on excess spending to mirror the economy out there.
This can be done for instance, by watching a movie at home rather than going to the theater. Buying a used car instead of a brand new one, etc.
Pay Cash For Everything
Every time you use your credit card, and you’re not able to pay it off once the statement arrives, what you’re doing is just committing your future earnings to the credit card company.
These are the future earnings which should be going to your regular household expenses, or that well deserved vacation or retirement fund.
But what you’re doing instead, is becoming a slave to debt.
The only debt you should incur is purchasing property which usually increases in value, such a real estate, or for a car since most can’t pay cash for one.
When paying cash, especially for larger items, try negotiating a cash discount.
Once the economy goes into a tailspin and credit becomes difficult to get, this is when cash comes king.
Saving For Your Future
Begin by writing down your financial goals. Ask the reason why you need to save, such as for a down payment for your first home, to save for retirement, or to pay for post secondary education for your kids.
Give each financial goal a dollar amount along with a time frame. In order to effectively save, you need to know exactly what you’re saving for.
You need to have a valid reason why you’re putting your money aside and locking it up.
Make sure you create a separate savings account for each pursuit and be disciplined about it. Realize just leaving it in the checking account simply doesn’t work, as you’ll find a way to spend it somehow.
Make sure you can make easy deposits into the saving accounts, or easily transfer money into it.
Most banks can set up automatic deposits on a monthly basis. This is the most convenient way, and treat it like another monthly expense.
Watch The Money Grow
Over time, what you’ll see is your money beginning to accumulate, which is rewarding and motivating. Most will then want to save even more. Saving and investing can become a habit in a positive way.
What you need is a concise budget that’s written down based on your income.
You need to track exactly where the incoming money is going out, to know the adjustments you need to make on how you spend.
A budget tells you how to manage your money, while helping you to delegate.
What budgeting needs is discipline, while not needing to sacrifice your current lifestyle. It’s just a plan to get where you’re financially going.
Eliminate All Your Debt
If you have debt, focus on saving to eliminate that debt first, while also putting a small amount aside for unforeseen emergencies. The majority of the money needs to reduce your debt.
The reason why you should do this is simple.
Why pay 20% percent interest on credit card debt, when all your savings does is earns you 2% percent interest. So pay off any debt you owe first, before you begin saving and investing.
The Habit Of Saving
After a while, what you’ll begin to do is contribute towards your savings, by putting all excess money you generate into your savings account.
This could be bonuses, raises, inheritances, and any other found money that you generate.
Doing so will not compromise your current lifestyle, as it’s money that was unexpected.
There’s no secret to saving money. All you need is to just start doing it. What’s often the most difficult is having the discipline to start.
But once you see your finances grow and gain momentum, you’ll become hooked on saving for your future.