Since it is an election year, we hear a lot about « saving » the middle class. In this article I’m going to present some ideas that may seem a little off base (and they may even make you a little upset) but to survive todays economy in the middle class, we all need a wake up call.
The truth is that no matter how much we want to blame government, rich people, poor people, banks, or whomever for our current problems we should not make the mistake of not accepting our own responsibility in what has happened.
Our parents generation didn’t believe in credit except maybe for bigger ticket items like cars and homes. But today we use credit to buy a cup of coffee for crying out loud (and just so we’re clear, I’m not picking on anyone. All the mistakes I talk about in this article I have made myself… sometimes more than once).
So to survive todays economy in the middle class maybe going back in time a little bit is a good idea. Many of us have gotten caught up in the consumerism of our society. It happens, don’t beat yourself up over it, just learn your lesson and move on.
Sure, consumerism is powered by slick advertising by big companies so they can continue to sell products. But again, we are doing ourselves a huge disservice if we don’t at least own up to our own culpability.
We didn’t have to buy things we couldn’t afford. No one made us do it. Whether we like it or not or want to admit it or not… we did it to ourselves!
I know, the first time I realized that it was hard to swallow. But after I got my head around it I realized that it is actually a good thing (in a way). If I did this to myself it means I can undo it too. I don’t have to rely on anyone else. I don’t need a bailout from a government that can’t afford to bail me out.
I can make changes, it will take time, and get myself and my family on firm financial ground all on my own! That realization is equal parts liberating and terrifying!
So, how do we as individuals dig ourselves out from the mess we helped create? Well, the steps are simple but it won’t be easy. It will take time and discipline and those are things that are current society is not big on.
Here are some simple steps you can take to get a solid financial future:
1. The first thing you must do is get out of debt. Free up as much money as you can in a month even if it’s just $20 or so. Apply that « extra » money to your smallest credit card debt along with your regular payment for that debt.
Eventually, you will get that debt paid off and then you can take everything you were paying on that debt and apply it to your next smallest debt.
If you keep doing that you will eventually be debt free.
2. Once you are debt free you need to establish a savings account. We need to stop thinking of credit cards as our « backup plan ». We should just forget we have them and try not to use them.
For me I had no choice. After a business failure and divorce I filed for bankruptcy. I didn’t have any credit cards so I had to learn how to make my sparse income work for me.
3. When you do eventually have some free money to invest make sure you know what you are doing, take the time to become financially educated. There are tons of books and home study courses that you can use to gain some basic investment knowledge.
Don’t ever just turn your money over to a « professional » and hope for the best.
I truly hope that you have benefited from the information in this article. I meant it with all due respect and I know from personal experience that oftentimes the things we really don’t want to hear are the things we need to hear the most.
Good luck and we can all survive todays economy in the middle class if we are willing to take control of our own financial