One of my favorite financial blogs is The Simple Dollar. Its founder and contributing writer is Trent Hamm who just wrote an extended, terrific post he titles, Ten Steps To Turn Financial Disaster Into Financial Independence. I encourage you to check it out.
People Do Live on the Financial Edge
Trent Hamm
The Simple Dollar
Introducing his post, Trent points out some of the facts about financial life in America today. The statistics are not encouraging:
- 76% of Americans are living paycheck to paycheck.
- 50% of Americans have less than three months of living expenses in total savings.
- 26% of Americans have no savings at all.
Looking at these facts he comments, “Most Americans are walking a dangerous tightrope. A single injury, a single job loss, a single unexpected child, a single automobile accident could very easily unravel their life, causing them to lose their homes, their automobiles, and leave them unable to even get the simplest of loans.”
Living on the Edge Kills Peace of Mind
Only those who are oblivious to the realities of our economic conditions today, or have let feelings of being unable to change things anyway, refuse to face the implications of these facts. But it is not necessary to let our fears prevent us from finding a better course for our future. There are steps we can take to make financial success possible.
In his article, Trent discusses ten steps you can take to help you reach your financial dreams. He begins with learning how to spend consistently less than you earn. He concludes with ramping up your savings for the life of your dreams. Each of his steps are well thought out and valuable reading.
In introducing these steps he discusses one point that I think is extremely important, our motivation for taking steps to improve our financial situation. In particular, he mentions the peace of mind we get from managing money appropriately.
Peace of mind is associated with living free from debt, with some savings in reserve, and having more than we need to live our lives without worry about having enough to pay the bills and meet any likely emergency. This peace of mind is a great benefit which in reality is far more powerful than most people imagine.
Tension Affects Emotional Well Being
Years ago I used to drive just a little faster than appropriate. One day I was on my way to a speaking engagement well over a hundred miles away from home and got off to an early start. I decided to drive a little slower than usual so I could have more time to review my thoughts for the presentation before getting there.
When I arrived at my destination I was surprised to discover something I never suspected. I realized that I felt more relaxed, far less tense, than ever before after a longer drive.
And why? Because I did not have to keep so alert to watch out for the patrol officers! Frankly I was somewhat stunned by the extent of the physical affect of this habit because I was so used to it as the norm that I did not even realize I was so affected by it.
That is the way I think it is with most people and their money. People are tense, frustrated, and in other ways emotionally affected by the practice of living on the edge with their money. And they are unaware that they are unnecessarily choosing certain practices that cause real stress in their lives.
Choosing Peace of Mind
With the help of the information offered on our website and elsewhere, it is possible for us to get in control of our money, get out of debt, save up some money for a cushion and begin to experience some peace with our financial lives.
At the same time we must remember that it is not a one time set it up and forget it step. It requires ongoing diligence.
Circumstances change over time, sometimes often and sometimes not, but they do change and we must adjust to them. Financial peace requires some effort to attain, but it is worth every ounce of effort it takes.
To achieve this end we have to take time to learn how to achieve these results. Then we need put these principles into action.
