Today, 80% of our workforce is in the working class sector and most are making ends meet with frustration. In the U.S., 70% of people are living paycheck to paycheck. More consumers are opting to keep their late model car, reduce consumption and yet have made little progress in decreasing their overall debt. Fewer individuals are purchasing at their favorite stores in an attempt to be frugal. Unfortunately, too many still do not know how to be successful with money matters.
When asking successful people to share their secrets for success, many share this common tip. “To be successful, one should do the following exercise; every 50 minutes, take 5 to see what was done and 5 to make it better”. If people would look at their budgets consistently, on a weekly or monthly basis, they would be more likely to improve their personal wealth and live healthier lives.
I would add that we also need to pay attention to details to create a realistic budget. We forgive ourselves for forgetting to budget for unexpected events and expenses. However, there are those routinely forget or ignore common events in their budgets. Too many times, we forget to budget for the car’s annual maintenance. Depending on your car that can be as little as $50 or as much as $5,000. How about birthday parties or wedding anniversaries. Depending on your lifestyle this might be one of the largest reoccurring expense that few add to their budgets. Most people do add Holiday shopping on their budget but never stay under the amount they budgeted. If you add Halloween, Thanksgiving, and all those other holidays to your list, you might find out how unrealistically we prepare for these annual expenses. Most people figure that if its a discretionary purchase there is no need to place it in their budget. I would recommend that you place all discretionary items in your budget and if you don’t spend it you add it to your savings.
How you decide to spend and save will make you feel wealthy. It is this notion of financial health that will make the recession a thing if the past. The answer of how we move towards a recovery is not simple. It will take a concerted effort and personal responsibility to make it happen. Banks and people will need to do their part to make things better. What is really important is how we will take these experiences and pass then down to generations ensuring that our current history does not reemerge again.