Remember the radio commercial from a few years ago, which used a play on Egypt’s famous river – the Nile? The punch line was “de Nile”… meaning denial.
In fact, denial is one of the biggest impediments keeping the average person from total commitment to the financial discipline needed for an effective budget and savings plan.
¦A case in point can be found in the results of a new study from the Society of Actuaries. Among its findings is the grim reality that nearly half (48%) of baby boomers have no financial plan to address the possibility that they might live longer than their resources. (See online article, “Golden Years or Fool’s Gold”, by Lee Conrad, 1/6/11, at “onwallstreet”; http://www.onwallstreet.com/blogs/product-guru-2670796-1.html
Without reviewing all the details, the study reveals that many people who are on the brink of retirement are not ready for their “golden years”. Between a lack of adequate savings, the stock market crash, and the housing and mortgage debacle over the past several years, combined with the reality of lengthening life expectancies, it is exponentially more difficult for baby boomers to maintain their lifestyle in retirement.
Adding another illustration to the fact that the average American has trouble with financial discipline is are the results from an online tool sponsored by FINRA. Responses from that web tool reveal that 20% of all American households spent more than their incomes during the previous year and 62% of them do not comparison shop when looking for credit cards. What that means is that 1/5th of the public violate a basic rule of finance, and 3/5ths don’t take time to ensure they have a credit card that best suits their personal needs!
This data proves that what we have covered in earlier articles is true – the BEGINNING of financial health is desire, commitment, and discipline. So start by gathering your spending data, develop a budget, and commit to saving, saving, saving.