Finance Roll

We've all heard that fortunes are often made in times of financial uncertainty, and that is certainly true. However, the more common scenario is that finances take a turn for the worse and leave many people in dire straits. That is the reality and the problem for which each of us must be prepared.

I'm not going to say that you can become rich in the current economic climate, but I will say that you can take steps to ensure that you at least hold your ground and not come off any worse, which I'm sure for many folks would be welcome advice. Basically, you have four basic rules to remember in planning your finances.

1) There has to be a viable financial source. So many times we spend money and don't really think about where it is coming from, choosing instead to just take a great deal on faith and pray it will somehow be there. But there are laws of mathematics at work here. If you subtract money for one thing, it may adversely affect your ability to pay for something else. Buying that stunning new coat makes zero sense if you end up without sufficient resources to pay your power bill. You should make out a detailed budget, taking what you have coming in and dispense it accordingly with what you have going out. If the outgoing figure is bigger than the incoming, you've got problems.

There are plenty of online tools that can help you keep track of your monetary assets and determine if you are in fact living within your means.

2) Satisfaction is fleeting, but debt is not. You may whip out that credit card at a moment's notice to pick something up, and before you know it you have accumulated several hundred or thousands of dollars in the process. Do not use credit cards unless you have the cash ability to pay them off. Rolling balances from one month to another will eventually catch up with you, snowball, and leave you under a financial mountain from which there is no digging out.

3) Know what you want out of your money and your financial goals. You need to set definable goals for yourself, establish a timeline for getting there, and then work your finances accordingly. Some goals may take months to reach; others may take years or even decades. But you should establish your goals and then be diligent to working towards them. Want a Corvette to celebrate your retirement? Try socking away a hundred bucks every paycheck for the next 15 years. You'll almost have enough to pay the thing off! That is a frivolous goal, I know, but you get the point. Slow and steady planning can make for a very satisfying result.

4) Develop good spending habits. Unfortunately, those of us with good spending habits are still quite likely to make bad decisions simply because we make so many responsible decisions every month that we think, "Ah, what's one little indulgent?". Indulgements add up. Automate and establish good financial habits, such as having certain payments and other obligations automatically withdrawn from your bank account every month.

Habits can make or break your financial goals.....you're going to get locked into habits one way or another...it is far better to make them good ones.

It's been said that money is power, and I believe that this is not limited to the acquisition of money, but even the simple act of staying out of debt. When you are in debt, you are giving someone else a certain amount of control over your life.

No, I'm not going to guarantee that you will get rich during these troubling economic times, but you do have
the power and the ability to come through relatively unscathed, if you can keep your head while all about you are losing theirs, at the end of the day, you will be okay.

Now go therefore and spend wisely....