Surviving Hard Times

I had dinner this week with a good friend who has been unemployed for a prolonged period of time.  He is bright, talented, enthusiastic and well educated. He is also getting up there in age and has been unfortunate enough to work for a series of companies that have failed. So, he is having a hard time getting his foot in the door, despite having a Masters degree and a wealth of experience.

Last weekend, I went to the funeral of one of our salespeople, who lived in my town. He was only 49 years old and he left a wife and daughter to find their own way in this world. His daughter is only a year older than my daughter and they go to the same high school. He had a sudden heart attack, despite being athletic, happy and well adjusted. It was all very tragic and unexpected.

Don’t Dwell on Your Problems

Before you start to get caught up with all of your daily problems.  Be very thankful for the some of problems you don’t have.  You can become depressed over how you should be making more money or how you didn’t get the promotion or the raise you deserve.  You can also waste a lot of time and energy feeling sorry for yourself because others have a nicer house and car.  But, there’s nothing productive about wallowing in self-pity or coveting your neighbor’s goods.  In fact, this is probably the most self-destructive kind of behavior you can indulge in.  If you want the raise, the promotion, the big house or the fancy car, then go out and get it.  Dying of cancer is a problem.  Being successful isn’t.

If you are one of the people in this world dealing with a devastating problem, then my heart goes out to you.  I won’t pretend to have some magical answer.  But, I will say that I hope you can enjoy the positive aspects of your life and not become overwhelmed by the negative aspects of the problem.

Be Thankful for What You Have

What I like to do for myself is to take a minute to be thankful for everything I have.  If you have your health, talent and an opportunity, then you can get whatever else you need from effort and ambition.  If you live in the U.S. or another affluent country, then you should be thankful that you live in such a great place.  You can change jobs, start a business and invest in a virtually unlimited number of opportunities.  And, when you earn some money, you actually get to keep 75% of it.  People are dying every day just to get into this country to have the opportunity you may be complaining about.

If you are reading this from a computer screen, then you are probably way better off then the majority of people in this world.  Never forget this.  People who watch a lot of TV tend to feel underprivileged, compared to the characters on The O.C. or 90210.  Don’t fool yourself into thinking you are poor.  An American welfare recipient is actually one of the richest people in the world.  If you have something to eat today and a safe place to sleep tonight, then you should be very thankful.

Be Prepared for the Unexpected

Step 1. Emergency Fund – Having been laid off twice, I can tell you that there is nothing quite as comforting as having some money put away.  Small problems can often be overcome simply with an emergency fund.  Even if you never have to break into it, just the confidence that you have it under control is amazing.  If you don’t have an emergency fund of at least a couple months of pay, then your are exposing yourself to a lot unnecessary risk and stress.  Why worry yourself over small problems?

Step 2. Avoiding Payments – Most people in the U.S. need a place and a car.  What most people don’t need are high monthly payments.  Believe it or not, I survived six months of unemployment with a family of four and never had to break into my emergency fund.  I put about $1,000 on a credit card,  but that was the total damage.  How did I do it?  I got some severance and some unemployment.  But, the key was that my mortgage is small and our cars are paid for.  I think about having new cars, just like everyone else.  I also want to remodel our kitchen with new appliances.  But, I try to keep it on a “pay as I go” plan, in order to avoid payments.  When problems arise, debt becomes your enemy.

Step 3. Being Insured – In order to deal with big problems, you need to be fully insured.  If you are unfortunate enough to experience a real setback, a couple months of salary probably isn’t going to be enough.  Losing everything you have worked for is a tragedy in itself.  Having health, life, home and auto insurance are fundamental to a secure future.  When I was young and single, I used to roll the dice with insurance.  Now that I have a house and a family, it just doesn’t make sense.

The Bottom Line

The bottom line is that tough times can strike anyone at any time.  There is no sure-fire way to mitigate catastrophic problems, like a natural disaster or a fatal disease.  Your goal should be to mitigate common problems, like a layoff or a health problem, so they don’t become catastrophic for you or your family.  Being prepared is a lot more pleasant than being bankrupt.

Almost everyone has heard the above advice dozens of times.  And yet, very few take any steps to prepare for the inevitable problems that arise.  This is likely because they don’t want to spend less now for something that may never happen in the future.  This can be a catastrophic financial mistake.

Are you Prepared?

Did ya hear about Fred, he’s unemployed
They threw him away like a useless toy
He went down the drain after 20 long years
No warning, no pension and nobody’s tears

Oingo Boingo – from the song “Nothing Bad Ever Happens to Me”

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