 Now that the shock of the recession is tempering, it is interesting to read financial articles that were written right before the extremes of the recession started. The March 1, 2008, New York Times article “Frugality Can Be Acquired, but It Can’t Be Bought” discusses consumerism up to that point. Did you know one of the people who were buying more house than they could afford? Some of those same people were then borrowing even more money against the house to finance more spending. In early 2007 consumerism was at a peak. Today, however, the buzz is that frugality is “in” and millions of people are looking for financial advice in order to avoid the harsh lessons that out of control spending taught us not long ago. The article goes on to ask this question "How do consumers learn to manage their money and deal with financial problems?". Many people don’t even have informal training in money management, but go on to graduate from school, get a job, get handed a paycheck and loan offers, and are left to their own devices. With no direction or previous experience is it any wonder that they often end up in financial trouble? Some make the point that there are just too many things to think about and oversee when it comes to money and people need access to better money management products and tools. What do you think? Using technology and professional accountants to manage your money is good if you are investing, but it is not necessary for every day money management. Managing a basic household budget and expenses can be a "do it yourself" project! Want to live a frugal but satisfying lifestyle? There is plenty of advice, on managing your money, available to anyone. However, there are basic principles that build a strong financial foundation that will put you on the path toward economic security.
1) Live below your means. If you make $100.00 then $100.00 is your means, not $150.00. Accept the fact that $100.00 is all you have, even though lenders may tell you that you can live like you make $150.00 through their loans and credit lines. 2) Grow your income. When your means are $100, but you want to live the $150.00 lifestyle you need to expand your means, not your credit limit. You can grow your income by marketing something of value and leveraging it into income. You can market yourself (your skill or expertise) to higher paying employers, your product, your service, or your solution to a problem. 3) Pay less than everyone else.Regardless of what it is you want to buy, it or its’ equivalent, can be found somewhere else for less than most other people are paying. Paying less that what everyone else is paying is a big part of advancing financially. You may not get the exact same make, model, options as others, but you should always pay less for like items (cars, groceries, shoes, furniture, etc.). There are many resources to help you find a better deal while meeting your needs. Click here to learn how to pay less. 4) Be proactive in your financial behavior in order to fend off costly problems.Letting things go is a great way
to lose ground financially. Little problems become large expenses when
they go unattended. Your appliances, car, shoes, hard drive, and even you
wear out. Yes, preventative maintenance takes time and effort. However,
the financial costs of unexpected breakdowns, replacements, and missed
opportunities caused by those two far outweigh the maintenance effort you
need to invest in order to extend the useful life of your possessions. 5) How to solve financial problems (without money).The government has often been accused of throwing more money at problems in order to solve them. Unfortunately, many people do the same thing. All of us will be challenged with problems, but how much we each spend to solve them makes a big difference in our financial well being. Financially successful people have discovered how to solve their problems without money. How do they do that? They remain flexible. They are open to new or alternative ideas. They continue learning new skills and solutions that they can apply when financial problems happen.
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