Are any of these familiar to you?
“If I can just make it to payday on Friday . . . ”
“If I lose my job, I’m sunk!”
“I was fine until my divorce (or illness), and then the rug was pulled out from under me…”
I doubt anyone goes through life without at least a few financial scars. These days, it is all too easy to slip over the precipice and go from a position of financial security to one of financial distress. While there is no quick fix, here are some things that have proven to be helpful in my own life and in the lives of many folks I have known.
Spend less than you earn. This, you might say, is the “one thing” that is required for financial success on every level. If you practice nothing else in your financial life, do this – always keep your outflows less than your inflows. Everything else is an extension of this one premise. Surely you have heard of “pay yourself first.” Same concept – prioritize saving some of your income for later instead of spending every last penny you have as soon as it hits your pocket. You can stop reading right here, implement this one thing, and you will have significantly improved your financial life.
Build the right habits. While you are spending less than you earn, figure out the best places to put that money you are saving. If you are the type of person that might waver in your discipline of saving, automate it. Have a set amount deducted from your paycheck or checking account on a regular basis and routed to a savings account that is harder for you to access. Soon you will stop noticing its absence, and you can then up the ante on your savings.