Have You Hit Your Debt Ceiling
What would happen if you operated your family finances the way the U.S. government runs it's accounts?
You would probably end up in prison. Before that you would be broke, penniless and likely miserable. Somehow our government is still considered a good lending risk despite the fact that the country is worth far less than it owes.
Not to say that anyone in Washington DC would listen to me, but if they did, this is the financial planning advice I would offer. See if some of these ideas would help you make better financial choices and enjoy life more along the way:
Step One - Know Where You Are
The first step in getting control over your money is to know exactly "where you are." What is your income? What are your expenses? What are you really buying with your money?
Then on a line-by-line basis ask yourself a simple question, "What am I getting in value in return for spending this money?" Compare that return of value to the cost. It would be good to order each line item with the greatest return on investment at the top.
Step Two - Know Where You Want to Be
The second step is to have some vision for your future. What are your goals? Is there something you are certain you want to have or experience now or some time in your future? How important are each of these things to you?
The clearer you are about what is most important to you - your values and your goals - the easier it will be to make the tough choices ahead that will allow those things to happen.
Step Three - Build a Plan
A good financial plan will connect the dots between "Where You Are" and "Where You Want to Be." It will be a map showing obstacles, threats and opportunities along the way to your goals. It will allow you to make better choices and keep more of the important things going in your life.
Understand the simple reality that you can't have everything and you can't go on forever living on debt - not you as a family and not the United States as a country - but you also don't want to lose the most important stuff in life.
Keep what's most important and start throwing out the stuff that doesn't matter.
Step Four - Take Action
This fourth step is just as important as the first three. If you don't take action on the plan, the effort you put into the first three steps will be wasted. In fact, none of these steps can be eliminated without destroying your chances of success.
Obstacles
This won't be easy.
Two of the biggest obstacles in your path are human quirks that come from tens of thousands of years of evolution.
--- As humans we are all hardwired to like shiny new things. No matter how much you have, you can and will always want more and you will want it NOW!
--- Humans are also what I call "pain-centric." When faced with two experiences, one that is pleasant and another that is equally painful, you'll pay a lot more attention to the pain and trying to avoid it. Your future goals, no matter how wonderful they are, will seem small compared to the pain that you perceive must be endured to get to that desired end.
Be Straight
The shortest distance between two points is a straight line. In the case of personal (or government) finance, that means being "straight" with yourself. This is no time to lie, be dishonest or ignore reality.
This is where the biggest challenge lies for the nation's leaders since nobody in Washington DC understands the real world outside of politics.
For the situation to improve and to make ends meet, programs and services will have to be cut. You want to be sure to cut as little of those things that are really important ... but you won't know what those things are if you are not honest and "straight" about everything.
You CAN Do This
While this will be very difficult at the national level, it is much easier for you to do with your family finances. Yes, there will still be cutbacks along the way and those will be painful.
But if you are honest with yourself about those things in life that are most important to you, and you work towards those goals with focus and enthusiasm, you can and will achieve a desirable result and you will find it to be most rewarding.