FINANCIAL ADVICE

Here are a number of tried and true tips to help manage your personal finances.  I recognize that some suggestions may be too late or not appropriate at this point in time, however they clearly make sense (and maybe dollars).

I vividly remember a boss many years ago advising me that employees quite often are living the lifestyle of their next raise, not their current level of income.  This is just a reminder to live within one’s means.

And more on this topic – Don’t worry about keeping up with the Joneses.  Only purchase with debt as little as you need.  The house does not have to be THAT big.  The car does not need to be THAT loaded with options.  Pre-owned sometimes is a better choice than new.  Once you make the purchase and incur the debt, you have little flexibility.  Sometimes it is hard to downsize those assets and debt, so think rationally before going in.

Building equity in your home (by retiring the mortgage faster) will help your long term plans.  Make one extra payment each year.  Or add to your monthly payment now.  Even if you have a thirty year mortgage, you can effectively make it a fifteen year mortgage with higher (and voluntary) monthly payments.  The total savings are immense.

Although I do not want to encourage more debt, you can tap into that equity in your home.  Only do it for the right reasons and the right plan to retire that debt.

When considering these decisions, think about how much income you will have.  Do not live off of the next pay raise.  And include savings (current and retirement) into your plans.  If you can’t make it work, then you are overreaching.  Just think about the position you are in now.  Can you make it work?  What can you do differently on the other side of this pandemic?  Eventually there will be another side.

Do everything imaginable (and legal) to build income and liquidity.  Cash is king is a phrase that comes to mind.   Ultimately you can only pay for needs with cash, which comes from income, liquidating assets, or debt.  Let’s leave your rich uncle out of the equation as well as stretching creditors, both of which are forms of debt.  At some point they need to be repaid.

Hopefully you made a retirement plan.  Stick to it.  Do not think that the government will be there for you.  Even if Social Security is viable in one form or another, even in the best of times it is only structured to meet a percentage of your future financial needs.  You have to work on your resources to meet the rest of those needs.

You are planning your financial life for decades, not days, weeks or months.  Take charge, map out a plan, and stick to it.

There is always credit counseling as well as (dare I say) bankruptcy filings.  Sometimes you need a fresh start.