Unfortunately, in life we experience setbacks. This is as true in finances as it is in anything else. I know that sometimes it seems as though it’s one thing after another. We had a flood in our basement just before Christmas, then 4th quarter estimated taxes for 2010 were due in January, and of course, we just finished sending checks to the State and the Federal governments for taxes. You probably have similar experiences: times when it seems as though one bill follows another.
Sometimes, too, we experience unexpected emergencies and catastrophes. When we have these setbacks, it can be tempting to think that we will never be able to get on top of things again. However, if you take the time to be in charge of your financial destiny, and make sure you are engaging in good financial behaviors, you might be able to weather the unexpected a little better.
Do You Rely on Someone Else for All Your Income?
To some extent, we all rely on someone else for income. Someone, somewhere, has to be buying a product or service in order for us to have paying work. But are you relying too heavily on your employer to ensure that you have the money you need?
Too much dependence on a more traditional job can mean letting someone else have a little more control over your financial destiny. If someone else decides to fire you, they are taking away your income. If they decide to increase your portion of premiums for health insurance, or slash benefits, there isn’t much you can do about it. And that can leave you with little control over your financial destiny.
Taking Control of Your Financial Destiny
Do you have to quit your day job and become an entrepreneur in order to control your financial destiny? Not necessarily. But you might need to cultivate some income diversity so that if something does happen with your traditional job, you aren’t as financially devastated. Dividend stocks, some web sites, or a small side business can all help.
You can also take control of your financial destiny through planning. Set aside money for emergencies, and save up for retirement. When you build up an emergency fund, you are more likely to be able to absorb the costs that come with natural disasters, or accidents. Saving up for retirement can help secure your future. When you are properly insured, your assets are protected so that your losses aren’t as great.
There are certainly things that you cannot control in life. However, you can control your financial destiny. With some planning and preparation, you can put your finances in a state that allows for you to weather storms, and come out ahead. At the very least, learning about how money works can help you get back on top after you have been down. Many successful entrepreneurs have lost everything — more than once. However, they know how to get money to work for them, and they usually have plans for recovery. When you go out and take charge, it is possible for you to control what happens to your money.
Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence. They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.