Personal finance is a really interesting subject for many of us. Obviously, you can count me in that group since I run Squirrelers! I’m also assuming you have an interest in it, otherwise you wouldn’t be here reading.
For those of us that blog about the subject, personal finance can be a multi-faceted, complex arena with so many variables involved. We talk about all kinds of topics, such as various topic of making money – some of which are traditional (jobs), and others non-traditional (online). There’s an emphasis on the latter in many posts. We also talk about endless ways to save money and pinch pennies. There are so many different things we need to buy or want to buy, and we talk about how to save on these different purchases. We also discuss investing quite a bit, whether individual stocks, funds, metals, and so on.
Having said all this, I think that maybe sometimes we need to step back and keep it simple, and remember that there is value to thinking inside the box with money. The basic framework for increasing net worth can probably be simplified as follows:
1) Get an education, without excess loans
2) Start your career or business
3) Focus on both protecting and increasing your income
4) Live within your means, discerning wants from needs
5) Maximize the gap between your income and expenses
6) Avoid debt, and strive to be debt-free
7) Invest your money, starting as early in life as possible
8) Practice smart asset allocation, while managing risks
9) Develop strong, genuine relationships with people
10) Keep yourself healthy and fit
If one does each and every one of those things, it would seem like the path to having a good financial present and future would be right there in front of us.
I know, it’s easier said than done! There are pressure points above, and sometimes we can’t control the actions of those applying the pressure. For example, we could have trouble finding a job in a tough economy, despite our best efforts. Or, our employer could have trouble and we could lose our job. Maybe our spouse is a shopoholic and we can’t save as a result. Or, maybe we have unforseen health problems that take up our time and energy, and take away from our work.
So clearly, there are things that we might have challenges directly controlling. But many of the other things we probably can control.
Bottom line: Thinking outside the box of course has great value. But by also keeping it simple, thinking inside the box in many instances, and following some clear steps – we could probably put the odds of success much more in our favor.