Ten Ways To Maintain Middle Class Status
By: Tom Chatham
Many people are now lamenting about how hard it is to maintain their former economic status. They have less money and more bills than ever. They cannot seem to figure out how they got in this situation. If only things would get better then everything would be alright they think. Nothing ever gets better until you stop and realize where your problems are coming from and make meaningful changes.
As I have said before, most people get into a financial situation and try to go on living as normal until they eventually run out of resources. Only then do they try to come up with a plan to deal with their problems. But by then, they have no resources left to help them fix their problems and are left with very few options. It is important to realize you have a problem while you still have the resources to effect a change. This is a very basic premise that eludes most people.
If you want to maintain a sustainable economic status that allows you a good quality of life you need to mold your living conditions around the resources you have available now and not what you think you may have in the future. If you have more money in the future to upgrade to a bigger home then great but if you own an expensive home now and the economy or your economic status changes, you may be stuck with what you have and cannot afford as many have found in the recent past.
When my father worked on the river he had a fiberglass boat with thick foam between the hulls. You could literally fill it with water until it ran over the sides and it would not sink. When your life and well being depend on something to float, it is good to be unsinkable. This is how you need to design your life. You need to surround yourself with the means to be unsinkable when others are drowning.
This means you need to make sound financial decisions about how you live. We all want nice things in life but when you go deep into debt to get them you are effectively tying a huge weight around your neck that can drown you if things suddenly go wrong. To prevent this you need to make conscious decisions about how to deploy the resources you have available.
1) Stop spending more than you make every month – The modern generation wants everything right now. Life moves faster now in many ways and people do not want to wait for anything. Having everything right now comes with a price. You will never get ahead if you are constantly in debt all of the time just so you can have it right now. Saving money, even a small amount, will provide you with capital to take advantage of opportunities in life. It will also provide you with funds to live on during emergencies when income or banking services are cut off for any reason.
2) Live in a home you can afford – Everyone wants to live in a nice home that shows how successful they have been in life. If you are currently living in a nice home with a large mortgage you need to ask yourself , can I really afford this? If not you really need to consider moving into a smaller home, preferably one you own free and clear. If this means you need to sell your current home and move into a small cottage then so be it.
3) Drive a car you can afford – Most people like to get a new car every few years. If you can afford it there is no problem but if money is tight you need to live within your means. An older car can save you not only on purchase price but on insurance, taxes and repair costs. If driving a newer car is a status symbol to you consider getting a classic car to drive. A classic Mustang or Camaro can be stylish and economical.
5) Produce more of what you need – One way to help you live within your means is to produce some of the things you use on a regular basis. This can mean producing some of your own food, fuel for your car or energy for your home. Every dollar you save is worth more than a dollar in purchasing power because you do not have to pay taxes on the money you do not have to earn in the first place.
6) Buy used and save – One way to get ahead is to buy used items instead of buying new. Furniture is a good example. Some older furniture is better made and will last longer than much of what you find today. Older furniture is also a better store of value than much of the mass produced stuff today. Antiques not only hold their value better but can be the status symbol you desire.
7) Learn to save money every week – The act of saving will help you stay within your budget. It does not have to be a lot. Even saving two dollars a week in a jar is a good start. Once you get in the habit of saving every week you may find yourself wanting to save even more.
8) Only maintain a few credit cards for emergency use – Credit cards are very convenient but they can dig a serious hole for you to climb out of if not used properly. They can help you build up your credit and provide a little extra during emergencies but paying lots of interest simply reduces the amount of money you will have for other things you need. If you go around paying twice as much for everything in life because of high interest you will ultimately have much less to show for all of your hard work.
9) Store your wealth in a medium that holds its value – Even if you expect some type of payment in the future you still need to put aside some funds just in case. If the entity providing you those funds fails for some reason, you could easily lose all of the money you were expecting. In a similar manner, storing your wealth in a bank is a gamble these days. Its about as safe as storing it with your alcoholic neighbor and his drug addict wife. You need to store excess wealth in a form that holds its purchasing value such as precious metals and keep them in your possession.
10) Don’t lose money – This may sound obvious but it never really occurs to most people until it is too late. Any investment of your money is an investment of your labors so you need to insure any investment will not be a losing one. Breaking even is ok but make every effort to make sure you do not invest in a losing proposition. There is always someone willing to separate you from your hard earned money for their own benefit. This includes friends and family members.
There are many more tips that can help you to get ahead and stay ahead in life but these are some of the most important and most basic. When you spend your time working for pay you are converting your time and labor into money. If this money is wasted then in effect your time and labor was wasted. If that is the case then you would have been just as well off sitting home doing nothing.
Everyone wants to have instant success today. The days of starting at the bottom and working up by saving are lessons never learned by today’s younger generation. The money printing by bankers has created easy credit that has trapped many in a revolving door of debt they cannot get out of by modern living standards. The only way to beat this debt trap is to live as older generations have and live within your means until you have the means to improve your living conditions. Only then will you be truly successful in life