What We Can Learn from the Government to Avoid Personal Finance Mistakes

The Financial Incompetence of Our Government - Hey, did you know that our beloved nation is in debt right now? If you didn't... then you must be completely oblivious-in which case how can you be reading this article on the internet? Go back to your hidden bomb shelter of ignorant bliss and enjoy yourself, while the rest of the country attempts to "dig ourselves out of this hole."

On the day after former President Bush announced the state of our economy... the apparent social perception was shock. But not I-I was only shocked that somebody had made such an obvious announcement... and that anybody could be surprised about it.

Apparently, somebody actually did ask "how did this happen" (referring to the supposedly unforeseen economic recession) even if it was only the media asking this question "on our behalf."

The answer to the question about why our country is in debt can be given many different ways. The way that the average American won't understand is an answer which uses a lot of confusing charts, graphs, and economical terms. Personally, I don't understand economics... and I don't care too. What I do understand, and you should too, is the simplest answer to why our nation is in debt.

Because our country doesn't actually have any money... instead it has credit. Maybe this is easier for you to understand. If you are unlucky enough to have a credit card, that means that somebody has granted you a fictional amount of money (credit line) that you obviously need to borrow because you don't actually have that amount of money in cold, hard cash.

But in trade for the, say, $2,500 credit that you now have... you will need to produce over $3,000 in cold hard cash. Make sense?

Well multiply that number by a bagazillion (yes, I made up this word) and you have the credit line of our government. The problem is exactly the same.. not enough money to cover the debt.

Economics 101

The whole concept of money is, in my personal opinion, a load of 'you know what.' No, I haven't studied economic matters and I am the furthest thing from an expert in this field. So please take my opinion with a grain of salt and be polite when commenting how wrong I might be...

However, and I say this as nicely as possible... you must be living in a cardboard box if you don't understand that borrowing money which you don't actually have will put you in debt. No, scratch that. Anybody who lives in a cardboard box has probably already learned that!

So how does an economy work? There is obviously more "fictional money" (credit) circulating around than actual money. This means that if you have actual money... you are technically richer than somebody who has more credit. Doesn't that make you feel better?

Yeah, me either.

My credit score is beyond terrible, and I wouldn't even qualify for any fictional money. (Oh, poor me.) That means I have to do what most Americans should have to do... live within my own means.

You see, that's not what an economy is about. Economy, from what I see that is, is about living outside of your means and trying to stay afloat of it all.

What Would Our Governments Credit Score Look Like Right Now?

It sure would be scary to see that, wouldn't it! I would guess somewhere in the negative bagazillion (maybe this word will catch on...) but here is the more important question... what does it have to do with me?

Outside of paying my taxes because I enjoy being a "free" US Citizen (as opposed to going to prison for tax evasion, that is) I couldn't care less about the financial incompetence of our government. It has nothing to do with paying my own bills... something which I struggle with but I struggle with it the right way... by using real money instead of fictional money.

Looking for a Clearer Direction Toward Financial Independence?

Anything you read on the topic of financial independence will tell you the exact same things: set a budget and stick to it, live within your means, etc.

It can be so frustrating when you don't have the money to cover your bills... but that's all part of life. Instead of pouting over it and envying your neighbor who has a bigger pool... suck it up and prioritize your basic needs.

In other words... take the money you make and make it work.

If you're having a hard time covering your rent or electric... maybe you should consider shutting your cable or satellite TV off. So what if everyone else has one... is it really worth being in debt to watch TV?

It might not sound easy to live without those extras because modern America is really blinded between "luxury" and "necessity." But when you weigh the pros and cons of responsible financial independence against reruns of the Golden Girls, it can't really be that hard to choose, can it?

Here's an even simpler explanation of how to learn from the mistakes of our government and actually achieve your personal goal of financial self sufficiency:

1. Whether or not you are eligible for credit... don't take it. It costs more than you actually have to borrow money, no matter what reason you need it for. Live within your means to avoid digging yourself into hole. (Which you can't dig yourself out of, by the way...)

2. Pay your bills... and pay them on time. This means important bills for things you actually need... rent, electric, transportation (to and from work) and groceries. All luxuries come second, including "everyday luxuries" such as cell phones, dining out, TV, etc.

3. If you're not making enough to cover your bills... the really important bills... make more real money then! Sure it's hard to find a job... but they're out there. If flipping burgers will stop you from living under a bridge then so be it...

4. Don't worry about what other people have. Maybe they worked hard and earned what they have, or maybe they are spoiled little brats (like our elected officials) and have everything handed to them. Stressing over it will only hold you down... instead you should be thankful for the things that you have... the things you have earned.

5. Recognize the shelf life of material possessions. It's nice to have a new Playstation... but don't forget that It will be outdated in just a few years. The newest models of cell phones will be ancient in just a few months. Is it really worth it to look cool for a few weeks?

6. The most important way to achieve personal, financial independence is also the most important way to find personal fulfillment. Once you recognize what a "materialistic value" is (which Is an empty nothing, actually) then you can find ways to enjoy life. Real ways... like taking a walk without a specific reason, and enjoying yourself on the way. Find out what makes you happy, that doesn't cost money, and enjoy your life.

7. Finally, it's worth repeating because the article is focused on achieving financial responsibility by learning through mistakes our country is making. Use your own money to live... don't live off somebody else! Work hard and earn everything... and you'll find that financial self sufficiency is only one of the many wonderful things you will achieve.

Best of luck to you in achieving your personal goals!