With the end of 2008 came a collective sigh of relief from the financial community. This was the worst year for the U.S. stock markets in the post-World War 2 era, and it seemed like there was no respite anywhere from anything: banks closed at a record pace, foreclosures surged at their own ridiculous rate, housing activity dropped to nothing, and the auto industry, once the surest bet in our manufacturing base, teetered (and still does) on the brink of bankruptcy.
You do what you always do, or at least what you should have always been doing: behave prudently. Do not allow yourself to be unduly sidetracked by predictions of sunshine and rainbows, nor by predictions of continued doom and gloom. Live like you should always live – with great prudence, perspective, and hard work, understanding that doing so is the best way to prosper in any sort of economy. For example:
Strive to live with little debt. It may not be possible for most people to buy a house or car without the use of credit, but beyond those essentials, for what reasons are you leveraging yourself? What is it you’re buying with a credit card that you cannot live without? Then stop it, and focus on paying down that which you’ve accumulated.
Lower your spending. When has it ever been a good idea to spend unwisely? Many consumer advocates are encouraging people to re-examine their spending habits and make adjustments in the wake of the economic implosion. My attitude? You should be doing that anyway…all of the time.
Invest as always. If you have a 401(k) or IRA, stay strong in a good portfolio of mutual funds. Last year was admittedly terrible for the stock market, but that climate won’t continue forever, and the new money you’ve (hopefully) continued to put in your funds each month has been buying new shares at great prices. Just keep going.
If you want a house, buy one…but do so because you want a place to live, not as an investment you hope to flip in a year for oodles of money. Most people who buy a house do so because they want a place to live they can call their own. They’re not seeking to become real estate moguls. If you like where you’re at and see yourself living there many years from now, don’t be afraid to buy. Get a good deal (they abound right now), buy your house, and live your life.
Maintain a cash reserve. That has always been a good idea, but you’d think it was a novelty based on how frequently you’re hearing it recommended these days. You should always maintain at least three months’ worth of living expenses in a liquid account. Always.
Work hard and endeavor to expand your resume. It’s funny, because a lot of articles now talk about how that’s so important in the current climate. Unless I’m missing something, I think it’s always been smart to stay ahead of the curve at work.
Can I ask you something? When was any of this ever a bad idea? In other words, if some or all of these ideas are particularly good strategies right now, was there ever a time they weren’t good ideas at all? Hardly.
M point is that you need not be overwhelmed by what you see and hear coming from the financial news media when it comes to making your own plans. Just listen to your own common sense. Spend and invest wisely, with prudence and long-term planning in mind. If you do that, there’s really nothing else you need to do…ever.
Robert G. Yetman, Jr. Editor At Large – www.ChristianMoney.com