Your Personal Economy
As I am sure you know – unless you have been hiding under a rock, have buried your head in the sand, or have simply placed your fingers in your ears and started saying “la-la-la-la” when the business news comes on – the US economy is in somewhat uncharted territory right now. News anchors and reporters, eager to drive ratings and sell commercials, sensationalize every drop of economic news, and relentlessly parade “expert” after “expert” across the screen with conflicting recommendations. With all this noise and confusion…
What should YOU do right now?
First, take a deep breath. Second, assess your “personal economy” – rather than listening to what’s going on with the national economy. With the exception of the losses in your investment accounts, which we, as individual investors, have very little control over…how are you doing?
Is your job stable?
Are you up-to-date on your bills?
Are you still able to contribute to your retirement plan?
Are you planning to take a vacation this year?
Are most of your friends and family members actually doing OK?
If you answered "yes" to most of the above questions, then your "personal economy" is actually doing relatively well. Why is this important? It is far too easy to get caught up in the mania and madness of the crowd...to allow events that you cannot control to dictate your actions and how you view things, instead of focusing on what you can control.
So what exactly can you control?
Keep an eye on cash flow. Stay within your budget and don’t touch your “rainy-day” fund. Having adequate cash on hand can be a big help.
Tackle Debt. Always a good idea. Depending on your rates, this can net you a guaranteed 6 -20% on your money.
Stay on track. Continue making contributions to your retirement plan and investment accounts. Take advantage of “buying low”.
Be Flexible. If you are nearing retirement, consider working longer. Already retired – consider taking on a part-time job. Give your nest egg time to recoup some of the losses.
The national economy is affecting everyone. Focus on your personal economy, take decisive action on the things you can control and turn off the background noise. Sometimes placing your fingers in your ears and saying “la-la-la-la” is not a bad idea.