The current financial crisis has not had a direct impact on my families’ income, per se, as my wife and I are employed in the engineering (biotechnology) and educational (higher education) professions. However, the current state of economic affairs has affected my attitudes and thinking of our personal finances in general, which is a positive by-product of the financial situation we face today both here in the US and globally.
With greed, corruption and mismanagement acting as the catalysts for the collapse of Wall Street, the banking industry, real estate markets and the automotive industries, it was time, I felt, to reassess my personal finances and spending. In reality, we (homeowners, tenants, business owners, employees, students, parents and consumer spenders) are a small sampling of the Lehman brothers, CitiGroup, the Big Three and the real estate agencies of the world. In other words, each and every one of us is our own corporation we spend, save, borrow, lend and consume, and, on occasion, we even cheat on our taxes for the ultimate goals of simply surviving, to becoming prosperous, and everything in between. Are we really, then, that much different than the institutions who have recently fallen on hard times? The answer is both yes and no.
While I would consider myself and my family to be financially stable at this writing, I do realize that our situation could become more challenging, financially, at any given time, do to a host of circumstances loss of job(s), illness, a prolonged global recession/depression, etc. So why not take a personal inventory check – right now – on my own finances, to review my own spending and investment practices, and not be overly concerned with Bank of America’s P & L statement.
Are my mortgage and equity loans at the best possible interest rate? If not, this would be an opportune time to refinance. And what about my investments? Are my 401k, retirement plans and saving accounts performing well? If not, I should plan on reinvesting or moving my money to better performing and more stable accounts. Should I consider purchasing an investment property, or start a business? Again, now seems to be the right time to do so. Is there frivolous spending going on that could be eliminated from my monthly budget? If so, this needs to be corrected.
Less is more, as they say. And am I green enough? This is not some political statement, nor just an opinion. We have the responsibility to pass along a good earth to our children, grandchildren and great-grandchildren. If we don’t take care of our own environment, by polluting less, recycling more and simply conserving whenever possible, than who will? And in the meantime, we will be saving money, which can be put to far better uses than simply being wasteful individuals.
The rise and fall of the institutions that are failing now did not occur overnight. The rise and fall, therefore, of our own personal corporations may need adjusting and rethinking, in order to obtain sustained growth and, ultimately, a sound retirement. Let’s not count on a government bailout to bail us out of our own personal financial situation. We shouldn’t count on money we may never see, did not earn, or that has the potential to be used inappropriately. Does this scenario sound vaguely familiar? We’re an intelligent society, and we need to put that intelligence to good use and not cheat anyone, especially ourselves and the people who rely on us to make these intelligent financial decisions.