Do You Have Courage?

                                     
                              Greetings to you in the New Year!

As I talked last time, 2011 will bring some challenges and opportunities for governments, organizations, business and individuals. In the past we've talked about creating wealth. Today I want to talk about the courage it takes to handle money properly.

Like you, I get pretty tired of hearing politicians talk about what they are going to do, and then never doing it.

The words you will hear from both democrats and republicans for the New Year will be directed toward the enormous deficit our country is facing. They will make loud mouth claims saying we must reduce spending after they (the 111th congress) added to the national debt the largest amount of money ever. It's like saying we must lose weight after dedicating your self to eating a box of Twinkies every day for a year! I agree with what Senator Tom Coburn said last week. "The United States will suffer from apocalyptic pain if the nation does not curb its massive debt."

If you think Coburn's comment might be an over statement, look at other countries who couldn't or wouldn't have the courage to implement common sense economic policy. My friends in Greece live in a country that will never be the same economically. Even as I write this post there is bombing in Athens by anarchist who are adding to the despair from the countries financial melt down. Even in the U.K. students are tearing things apart because of the entitlement mentality that countries can't afford any longer. In the U.S. our politicians will make good common sesne statements, the problem is, they don't have the COURAGE to do anything about it. And if they don't acquire that courage quickly, we soon could be going down the same path as Greece, Spain, Portugal and others.

But before we criticize them too much, possibly many of us should look at our own financial situation and lack of courage and do something about our own personal and/or corporate balance sheets. The problem of living beyond our means is systemic. I don't want to be an alarmist, but if individuals and companies don't get serious about money management  we will be looking at a bleak financial future.

Look at the following points which have government, personal and organizational implications.

1. You just can't pay for everything or buy everything no matter how well meaning it might be. That's common sense, but we must have the courage NOT to spend. We must understand that some programs and habits MUST be eliminated. This may include meal programs for low income kids, social security benefits, your habits of eating out or providing benefits to employees you can't afford. Unions must come to grips with financial reality and give up their "I want mine regardless" attitudes.

2. A little adds up BIG time. Spending 5 bucks here, 3 dollars there ends up depleting your account quicker than you think. Some in my own family think I'm "tight" with money when it comes to spending but the fact is we are financially healthy (not rich) because of the courage and discipline NOT to spend those little amounts that we encounter each day. The same is true for governments and business. Washington D.C. doesn't even talk billions any more because they have piled up trillions of dollars on our debt with earmarks that, independently, may not look like much but in the whole it is an unsustainable habit and a budget killer.

3. Saving money is not the same as not spending money. In government we can not play games with this area of financial discipline. We must adopt the "just say NO" to seemly good deals and programs. In our personal lives, those after Christmas sales will kill ya! It's still money coming out of your account, so unless you just can't live with out it, don't spend it!

4. Pay your self first. Regardless of your age, make certain you put back 15% of your earnings into your 401, IRA, SEP account. You cannot depend on the government being there for you in the future. Social Security was never meant to be a retirement program to begin with. The new retirement age will probably be 75 yrs. old, if our government has the courage to do something about Social Security entitlement. This applies to business as well. I know of some good organizations who survived the recession because they were not cash poor.

5. Get out of debt. If you have debt hanging over your head now, put in place a plan to pay it off. Don't just say "I will work on getting out of debt.", write down the blueprint of when and how that's going to happen. Then discipline your self to do it. As for your government representatives, hold their feet to the fire this year!! Write them and call them regularly with your thoughts on financial issues. Watch their voting record on every bill and then work to get them out of office if they don't have the courage to make the tough decision to get us out of debt! No more talking, it's time for action. If we as voters do this collectively, we again can take our government back and make sure they work for us.It's time for courage to go along with common sense.

6. Educate your employees and family members about financial issues. This is a constant drum beat of mine. I'm forever blown away at how little people understand sound financial principles. Employees are at a loss to understand the importance of eliminating cost, how wealth is created and the free market system that has made our country the economic power it is. I continue to meet brilliant people who are financial morons. I believe every company should have REGULAR financial education and information available and communicated.

It's true, money won't make you happy. However, financial health will allow you freedom to be generous when it counts, and give you peace of mind which will allow you to work on the other areas of personal, business and government life. There is nothing wrong with having "stuff", but that stuff is a whole lot more fun when it's paid for.

In 2011, let's stop talking and let's have the courage to get our finical houses in order. It really is our future were talking about.