By Mike Haubrich | Posted: Wednesday, November 5, 2008 12:00 am
You know that aching feeling you have a couple days after starting a new fitness routine. Hardly able to lift yourself out of bed, you shuffle to the coffee maker then realize lifting your arms overhead to reach the filters is simply too much to ask of your upper body.
These days, I feel like the whole country is suffering from financial fitness fatigue. Keeping up with the gyrations of the daily market feels like an aerobic exercise. I've run marathons and felt less tired than at the end of some days recently. And it certainly feels like we're running uphill, carrying 50-pound bags of rocks on our backs. The country is sore and tired and out of shape.
For many, the events of the recent months have impacted pivotal life goals such as retirement plans. The tremendous loss of wealth that many have experienced feels much like a torn tendon: No matter how long you take to recover, it'll never quite be the same. College savings have been decimated, leaving parents who intended to fully or partially fund their child's higher education realizing that goal may go unfulfilled.
As a society, we've allowed ourselves to become more like couch potatoes than athletes when it comes to managing personal finance. We listened to a government that told us that everyone is entitled to own a home, no matter what level of income is earned. We've been influenced by Hollywood-crafted lines giving us such wisdom as "Can't afford it? Freakin' finance it!" As a rule, we spend too much, save too little, overextend our credit, retire too early and fail to accept personal responsibility.
The person who earns $50,000 a year and holds a $500,000 house mortgage shouldn't cry foul when the threat of losing a house she couldn't afford in the first place finally surfaces. A 50-year-old who does not have a sustainable source of income to fund a potential 30- or 40-year retirement, can't question whether now is the right time to stop investing in his career asset. People who opt to participate in hedonistic spending sprees don't have the right to complain that they can't make ends meet.
Those who have lived within their means, invested wisely and saved for their future feel like they've just run around the block, pulling a wagon full of those who are unable or unwilling to take the same measures. That has got to change, and those freeloaders need to jump out and start pulling their own weight. It's the only way we'll get back to being a financially fit nation, and it means we're going to have to start flexing some underused muscles.
Here are a few questions you can ask yourself to estimate how far out of financial shape you may have gotten:
n Are your spending habits in line with your earnings?
n Do you have a monthly budget and do you stick to it?
n Are you saving at least 10 percent of your earnings? Right now, it may be too scary to invest, but it's never a bad time to save.
n Are you investing in keeping your career skills current and relevant in today's changing work environment?
n Are you maintaining a robust network of professional contacts in the event of layoff?
n Are you taking personal responsibility for ensuring that you're not relying on being rescued or "bailed out" by some unrealistic entitlement?
n Are you helping your children develop healthy spending and saving habits?
If you've answered "no" to any of these questions, you might be a great candidate for getting into financial shape. For some additional resources on financial fitness, refer to the Web site below.
Michael Haubrich is president of Financial Service Group, a registered investment advisory firm in Racine. On the net http://www.toyourwealth.com.