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When the going gets tough, get back to basics

Posted Apr 21 2008, 09:36 AM by Karen Datko
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This post comes from J.D. Roth at partner blog Get Rich Slowly.

Stories about national economic woe abound. I've had conversations with a few of my friends about the mortgage mess, about recession and a possible bear market, and about the nature of poverty. The economy is sour in the United States (and elsewhere in the world), and this frightens many people.

I don't buy into the forecasts of economic doom. I'm an optimist. Things may get rough, but they've been rough before. Besides, I believe that I have more control over my financial future than the general economy does. If I make smart financial choices, I can weather the storm.

Whatever happens, I'm going to pursue the get rich slowly philosophy. It's worked for me so far, and I'm confident that it will work in the future (whatever that may bring). I will:

It almost sounds like a Boy Scout pledge, but I don't care. As I've developed these skills, my financial life has turned around. These behaviors helped me eliminate debt, and now they're helping me build wealth. And all of these are things that I can do to control my money, regardless of whether we're in a recession or an economic expansion.

When the economy is good -- especially your personal economy -- it's easy to slip into bad habits because there's a greater margin for error. Tough times require getting back to the basics. If you believe we're headed for a recession, don't panic. Stay calm. If you take control of your finances and make smart choices, you'll probably be fine.

Other articles of interest at Get Rich Slowly:

"How to make yourself recession-proof"

"Economic mobility and the American Dream"

"You are your own worst enemy"

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Comments

 

Here's the problem...our economy is a Catch-22.  We live in a spending driven economy, so if people live within their means and don't use credit cards then businesses lose money.  Because we all worship the stock market and demand a profit each quarter.  

So either the consumers have to be in debt and broke from buying stuff or the businesses have to fail because the consumers aren't buying their junk.  It's an endless circle.

WD (Posted 04.21.08 10:12 AM)

If people live within their means, over the long term, the economy will adjust and businesses will make money by providing value, instead of creating debt slaves.

Also, I agree with all the points, but sometimes you can do everything right and still get screwed.  A large number of employees at Bear Stearns would fall into that category.  But then again, that's what the emergency fund is for.

Enginerd (Posted 04.21.08 5:33 PM)

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