Sunday, October 30, 2011

How To Overcome A Bad Financial Habit - Depending on Others

Over the last few years this country has been in bailout mode. The banks, car makers, some states and unions have been bailed out. The average person is also looking for their fair share of the goodies coming from Washington. Lets also put on the list food stamps, welfare, unemployment and other assistance. There is a place for this kind of help but I worry never ending support is bad in many ways. It's hard to believe but there was a time when none of these programs existed. When trouble came you were either on your own and you suffered alone or you were lucky enough to have friends and family to help in your situation. I am not against a public safety net. I believe that not providing your own safety net is unconscionable.

Definition of self-reliance:
Reliance on one's own capabilities, judgment, or resources; independence.

Self reliance is a skill that we try to teach our children. We want them to stand on their own two feet. Most get the teaching but there are always a few that don't apply themselves and depend on others for their support. Whether it's the kid that doesn't want to grow up or the adult that depends on financial support from parents or others well into their adult life. If this describes you or someone you know, there are ways to retrain yourself and be self reliant.

1. Work.
This can be an odd concept for many people. The foundation of being self reliant is to have a way to make money. Without a consistent in flow of cash on a regular basis you can not support yourself. Those that do find work rewarding an profitable find it strange when people turn work down and lead a life of minimal subsistence. There are many people out there that depend on others to give them a place to live, food, and clothing.

2. Income.
With a job you will be receiving income. With your income you now need a plan to use it. Creating a budget is telling your money what to do. It's a map to help you be self reliant. You will be able to buy the things you need and not depend on others.

3. Stay with Cash.
When your first starting out stay away from the financial system. Start an envelope system for your expenses. An envelope for your rent, food, gas, clothing. Stay away from banks, payday loans and any other financial process. They haven't served you well, you don't need them.

How To: Create A Budget

4. No credit cards.
For this to work credit cards are off limits. You don't have the money to pay them and you will definitely be tempted to over spend.

5. Be prepared for the unexpected.
When something unexpected happens is the time your self reliance will show. Another envelope to add to your budget is "Emergency Fund". This envelope holds the money to pay for the unexpected. An example is if you need health care, auto repairs, leaky roof, or anything that comes unexpected. This envelope must be filled with a portion of each weeks pay. It must be filled consistently. This cash reserve will keep Murphy away from your door. It's your insurance policy. It's the most important part of your plan for self reliance.

10 Popular Excuses for Not Saving Money

With this plan you can stand on your own two feet and be self reliant. You will not need to depend on others in time of need. It will take work and dedication but the rewards are well worth it.

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