Financial Lessons from the Past Still Apply in Today’s World
by Ethan Hulme
If the recent financial turmoil has taught people anything, it’s that maybe attention should be paid to the age-old clichés passed on by parents and grandparents. Take it one day at a time—the new reality for most Americans when it comes to financial recovery. Don’t put all the eggs in one basket—a poster child example for financial diversification.
So keeping the “what’s old is new again” mantra in mind, here are some famous sayings from previous generations that may serve people well this year and beyond.
Don’t cry over spilled milk. The recession is over, and it is time to start putting the pieces back together. It might take a while—patience is a virtue, after all—but everyone needs to start somewhere.
Save for a rainy day. Whether one calls it an emergency savings fund or a rainy day fund, the idea is simple, but changing behavior is not. Money is easy to spend, and there’s no question that there is still plenty of “gotta have it now” in everyone. It’s time to slow down on spending and start saving.
Next, resist the temptation to raid savings. While most Americans have plenty of credit card debt (and the issue needs to be addressed as part of one’s financial picture), resist the temptation to raid savings to pay it all off immediately. Also, resist the desire to raid savings for cash purchases. If one succumbs, the amount withdrawn should be replenished as soon as possible.
A penny saved is a penny earned. For an emergency savings fund, a standard savings account or money market account should be sufficient. However, thinking long-term, consider certificates of deposit (CDs). CDs help force one to commit money for a period of time and can start to make saving money a more permanent habit.
Walking on thin ice. The economy got bad enough that some people had to sacrifice the standard financial protection that people always took for granted. For those that have terminated a life insurance contract, now is the time to begin shopping around for a new one. It’s hard to think about, but the time to protect the family is now. As the adage goes, never put off until tomorrow what can be done today.
Home is where the heart is. It’s also where much of one’s equity probably is, too. Look into home equity loans to help consolidate debt and get back on track. Lending standards are now tighter, but banks want business and will work with people to meet their needs.
Another day, another dollar—unless one is as sick as a dog. While savings should help protect a person if he/she loses his/her job, what happens if one gets sick or injured and cannot work for a period of time? Consider disability income insurance to help cover living expenses and protect savings in case of illness or injury.
Lend a helping hand. Reach out to others in need through charitable giving and by volunteering time and talents. There is plenty of need out there right now, and every little bit helps.
Stop and smell the roses. We have all been through a lot over the past several years; virtually none of us is untouched by the financial turmoil. Perhaps the most important investment is time spent with family and friends.
Ethan Hulme is a financial associate at Thrivent Financial, 13901 N. Harvey Ave., Edmond. For more information, call 405-242-2122 or email Ethan.Hulme@Thrivent.com.