Three Ways to Thrive in a Struggling Economy

While the economy seems to be showing a marked improvement from where it was at its lowest point, there is no guarantee that it will continue to improve and remain good for any length of time. Indeed, market indicators have been shaky at best. It would be wise to take this time of introspection to learn from mistakes made during the recent financial turbulence.

When the economy was earning a gold medal with a 10.0 inward somersault in the pike position, people fell into two distinct categories: those who struggled and those who thrived. The people who struggled tried to keep up with their lavish lifestyles when money was tight, but those families that thrived during the downturn already had good frugal habits in place. Following is a list of some of the most common financial pitfalls.

Food: Poor Planning and Eating Out

There are many good reasons to dine out in a restaurant: celebrations and first dates are a couple of them. Some bad reasons people use to excuse their dining out is that they are too busy or they do not feel like cooking, or they cannot make meals taste as good as their favorite restaurant can. These excuses boil down into the fact that this basic skill has been delegated to someone outside of the family. A decision should be made about whether they are willing to sacrifice a bit of flavor for more financial security. Making a weekly menu and buying a good cookbook will go a long way toward saving a ton of dough for the family’s future.

Mortgages: Too Much House

During the heyday of home buying several years ago, many people bought a much larger house than they could realistically afford. The housing market tragedy has become infamous for the role it played in people losing their homes recently, but that scenario can be avoided this time around if families choose a smaller home than they can afford; that means the total cost of the mortgage should not be more than one quarter of the family’s take home pay. There is no sense keeping up with the Joneses if their house is getting repossessed anyway.

Toys: Cool Toys are Costly

There are many must-have items on the market today, from phones to eReaders to video game systems to vehicle accessories. These items are called status symbols for a reason: people of status (ie: them that got) can afford them. There is no sense in having huge alloy wheels with spinners on a vehicle if you can’t afford the tags or insurance for it. Why buy those cute designer pumps and matching bag only to stand in the unemployment line?

Goals and a Budget: The Ultimate Status Symbol

The family that was able to keep their financial heads above water when times got rough did so because they wrote down their goals and created a budget. The budget allowed them to reach their goals. No, they knew that there would be little glamour and convenience, but they felt no pinch when such things were suddenly hard to come by. Only now do many of us realize that peace of mind is more precious than any dinner out or fancy toy.