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To Your
Wealth / November 2008 Getting back into financial shape will require
some flexing You know that aching feeling you have a couple days after
starting a new fitness routine. Hardly able to lift yourself out of bed, you
shuffle to the coffee maker then realize lifting your arms overhead to reach
the filters is simply too much to ask of your upper body. These days, I feel like the whole country is suffering
from financial fitness fatigue. Keeping up with the gyrations of the daily
market feels like an aerobic exercise. I’ve run marathons and felt less tired
than at the end of some days recently. And it certainly feels like we’re
running up hill, carrying 50-pound bags of rocks on our backs. The country is
sore and tired and out of shape. For many, the events of the recent months have impacted
pivotal life goals such as retirement plans. The tremendous loss of wealth
that many have experienced feels much like a torn tendon—no matter how long
you take to recover, it’ll never quite be the same. College savings have been
decimated, leaving parents who intended to full fund or help fund their
child’s higher education realizing that goal may go unfulfilled. As a society, we’ve allowed ourselves to become more like
couch potatoes than athletes when it comes to managing personal finance. We
listened to a government who told us that “everyone is entitled to own a
home, no matter what level of income is earned.” We’ve been influenced by
Hollywood-crafted lines giving us such wisdom as “Can’t afford it? Freakin’ finance it!” As a rule, we spend too much, save
too little, over-extend our credit, retire too early and fail to accept
personal responsibility. The person who earns $50,000 a year and holds a $500,000
house mortgage shouldn’t cry foul when the threat of losing a house she
couldn’t afford in the first place finally surfaces. A 50-year old who does
not have a sustainable source of income to fund a potential 30 or 40 year
retirement, can’t question if now is the right time to stop investing in his
career asset. Individuals who opt to participate in hedonistic spending
sprees don’t have the right to complain that they can’t make ends meet. Those who have lived within their means, invested wisely
and saved for their future feel like they’ve just run around the block,
pulling a wagon full of those who are unable or unwilling to take the same
measures. That has got to change and those wagon-riders need to jump out and
start pulling their own weight. It’s the only way
we’ll get back to being a financially fit nation and it means we’re going to
have to start flexing some underused muscles. Here are a few questions you can ask yourself to estimate
how far out of financial shape you may have gotten. Are your spending habits
in line with your earnings? Do you have a monthly budget and do you stick to
it? Are you saving at least 10 percent of your earnings? Right now, it may be
too scary to invest, but it’s never a bad time to save. Are you investing in
keeping your career skills current and relevant in today’s changing work
environment? Are you maintaining a robust network of professional contacts in
the event of layoff? Are you taking personal responsibility for ensuring that
you’re not relying on being “rescued” or “bailed out” by some unrealistic
entitlement? Are you helping your children develop healthy spending and
saving habits? If you’ve answered “no” to any of these questions, you might be a great candidate for getting into financial shape. For some additional resources on financial fitness, click here. |