Many people are picking up the pieces of their personal and business finances after the wild economic winds of the last few years. In this post we’ll take a look at some actions that can strengthen your financial “tree” and help it stand tall against strong economic winds.
A tremendous storm blew through my Phoenix neighborhood last week. Violent storms are common during the monsoon season in the desert but we’ve never seen a storm this ferocious. Our neighbor’s fifty-foot Eucalyptus tree was uprooted by the strong wind and crashed through our wall. Fortunately no one was injured and no houses were damaged.
I’ve had a deep dislike for this tree that was planted in a flower garden and constantly surface watered causing the roots to remain shallow. It perpetually shed bark, seeds, pollen, leaves and branches into my pool. Each weekend I silently cursed this tree as I scooped the garbage from my pool. The Eucalyptus tree is called the “Widow Maker” in Australia because of its tendency for large branches or whole trees to fall and kill people and animals. Now I understand how it got its nickname.
Our financial lives can be like this tree. The violent winds of life blow from a direction and at a speed we don’t anticipate and are unprepared to resist. For years the predictable economic winds blew and many financial trees withstood the gusts. The winds of the current financial crisis began blowing in 2007 and left many financial lives uprooted.
Maybe your financial tree’s roots stayed near the surface and were never driven deep by the watering of shrewd saving, conservative borrowing and wise investment. The visible canopy of your financial tree grew too large by acquiring things you didn’t need and couldn’t afford. Your tree became increasingly unstable as it grew taller and the roots remained shallow.
You may be sawing your fallen financial tree into pieces today. Maybe you’ve contracted with lawyers and accountants to clean up the financial debris after the storm. Or possibly you were one of the few who shrewdly watered and pruned your financial tree to withstand the unexpected wind. In any case today is a day to begin again if your tree has fallen or to prepare your tree that survived to withstand the next financial storm.
Here are some suggestions to prepare for the next big blow:
- Keep your financial tree pruned. If you must buy something new, donate the old item that it replaces. Stay light and free from too much stuff.
- Live within what you earn. Don’t try to compete with your neighbor’s finances and allow your money branches to hang over their fence.
- Force your financial roots deep into the ground through disciplined saving, careful spending and shrewd investing.
- Borrow only what you can comfortably repay. Don’t fertilize and water your financial tree with unnecessary debt.
- If your financial tree gets blown down, be accountable for the decisions you made. Don’t look for a bailout. Clean up your own mess.
Join the discussion: What are you doing to prepare your financial tree for the next violent economic wind?