The housing crisis has a lot of people taking a closer look at their finances and worrying about whether they too may be at risk for losing their home. There are a lot of great lessons that can be learned from this crisis, and they can be applied to all areas of your finances. Let’s take a look at some of these important lessons.
1. Don’t overspend.
It is vital to know and understand your own limits. We all know that overspending is not the smartest thing to do, but it’s so easy to get lured in. Many of the homeowners that are now homeless knew very well that they were overbuying their house, but they fell in love with it. Main point to learn: Emotion has no place in your finances. It doesn’t matter if it is the perfect house – or the perfect whatever. If you cannot afford it, you cannot afford it. It’s not a matter of life and death. In your retirement years, you’ll thank yourself.
2. Financial disasters can happen to anyone.
Everyone from the worst subprime customer to big sports stars have been affected by this housing crisis. When financial disasters occur, it doesn’t matter who you are. If you are not prepared, you will not be able to weather the storm. Never fall into the trap of thinking “it won’t happen to me.” The fact is, financial disaster is looming for each one of us, without proper planning and without the right management of our finances.
3. Having more than one stream of income is vital.
You may be set right now with your job, but what if you lost it tomorrow? What if you got sick? Relying on one stream of income is not smart, especially if you are dealing with a mortgage payment. You’ve got to be able to bounce back from a financial disaster. The best way to do that is to cut your reliance on your paycheck by creating more than one stream of income.
4. There is no safe investment.
Some of the most expensive houses in the best neighborhoods are now sitting empty. While there are good investments, there is never a sure bet in life. Always make contingency plans and never put all of your eggs into one basket. The only sure things in life are death and taxes, and it’s best to be prepared for the worst.
5. You can’t rely on anyone else to bail you out.
While big plans are in the works for bailouts, there is a lot of opposition and even if they pass, they will not be able to help everyone. You can only rely on yourself – not the government, not your family. By taking responsibility for your finances, you’ll be able to get through any financial problem with grace. Always have a backup plan and never rely too heavily on your income or on an investment. You never know when the bottom may drop out.
Photo Credits: 1
Related Posts -
Money Management During Tough Financial Times Personal money management can absolutely be a challenge, especially when you are tight on cash. Payday never seems to come in time, and your pockets probably feel empty long before the bills have all being paid up. Here are some basic but essential tips for money management that can help...... -
Does Your Financial Future Look Gloomy? While no one can look into a crystal ball and determine where they will be financially in twenty, thirty or forty years, there are some early warning signs that may indicate that the future might be a bit gloomy. The key to successfully preparing for your future is to avoid...... -
How to Ruin Your Financial Life By Ben Stein Ben Stein is a well known personality that many consider to be a genius. His book, How to Ruin Your Financial Life is incredibly concise, coming in at under 130 pages, and most of it reads, as the title would suggest, as a guide to how to end up in...... - Sunday Money Madness - Happy New Year! Happy New Year Everybody! Let's kick off the first of this year's roundup with a bang! Credit and Debt No Debt Does Not Mean Good Credit says Credit Karma. All Financial Matters posts Bureaus Roll Out New Credit Score Formula for 2009. Finance for a Freelance Life asks Got Gift......
-
6 Steps to Get Back on the Right Financial Track Millions of Americans have found out this year that they are in dire financial straits and this came as a shock to most. Whether it’s a new variable rate on a mortgage, higher gas prices or just the higher cost of living, many of us are not as financially secure......
Related Websites -
Even More Tips to Improve your Serve There are a great number of different tips that you can employ for improving your tennis game, especially when it comes to serving. Right now, let us talk about the steps that can be taken to increase your serving capabilities. When you increase your ability to serve, you can...... - Buying a Used Green Hybrid Car Given the newness of green hybrid electric cars, you might not think it's easy to find a used one for sale. They are out there, though. Many people who are financially fortunate enough to be able to do so tend to swap out cars every 2 or 3 years so......
-
Keeping the Right Perspective During Your Diet Dieting is not for the faint hearted, and it is not easy. If you fail to keep the right perspective during your diet, it is all too easy to give into cravings, to fall off the wagon and simply give up. Before you even think about going on a diet,...... - Zen Golf - Mastering the Mental Game By Dr. Joseph Parent It is said that the game of golf is 90% mental and every year, numerous books come out that are geared towards mastering the mind game. While some are good, most fall into the category of "it might work for someone, just not me." This book by Dr. Parent......
-
Collecting Money World Wide There are several money collectors here in the United States and around the globe. There are even some people who make special trips to other parts of the world just for the purpose of collecting currencies for their personal collections. Many people go to some of the events and trade......
- Plans Wind Chimes Garden Decor Yard, Garden & Outdoor Living
- Round Plans Wooden Planters, Pots & Window Boxes Gardening & Plants Yard, Garden & Outdoor Living Nursery
- Personal, Field Gear Original Items Current Militaria (2001-Now) Militaria Collectibles
- Pouches Personal, Field Gear Surplus Militaria Collectibles
- Long Stream Seeders, Sprayers & Spreaders Garden Tools & Equipment Gardening & Plants Yard, Garden & Outdoor Living Nursery
Categories:
Budget, Diversification, Financial Security, Income Streams, Investing, Money, News, Personal Finance
Tags:
3 comments ↓
I would further clarify your list by stating that your residence is not an investment. It is an asset that provides shelter services to you. This means don’t create unnecessary risk to those services by treating it as a highly leveraged investment.
@ TML
Indeed. Protect the roof over your head.
I’ve been mulling over #3 for a while now: “Having more than one stream of income is vital.”
Finding that income stream is the tough part though…
Leave a Comment