The first cornerstone of financial wisdom is personal responsibility.  You have to take charge of your money and get things under control!  No one else will do it for you.

I believe this with every fiber of my being.  I also believe that this is the ultimate solution to the problems we are having in our economy.  The quicker that individuals wake up and start applying sound financial principles in their lives, the sooner things will improve.

Do you need financial wisdom right about now?

With things tightening up in the economy, I think more people than ever are looking for some tried and true advice for succeeding with money.  Are you one of the people that needs financial wisdom?  Ask yourself these questions:

• Are you sick and tired of never getting ahead financially?
• Are you broke despite earning good money? 
• Are you constantly running out of money before the end of the month?
• Are you afraid you might lose it all from what’s going on in the economy? 
• Are you up to your eyeballs in credit card debt?
• Are you worried about losing your job because you live paycheck-to-paycheck?

If you answered yes to any of the questions above, then you are ready to get back to the basics when it comes to money. 

Need sound financial advice?  Stay tuned!

Over the next several articles, I am going to write about basic financial wisdom.  The advice I will share is in no way a get rich quick scheme.  In fact, getting rich is not the point.  Instead, I want to start at square one because I think that’s where many Americans are at.  I am going to write about topics such as:

• Debt-free living – yes it is possible and no it doesn’t hurt!
• Controlling your money with a budget – this is where freedom begins!
• Frugal up! – finding places to cut back to move ahead!
• Creating an emergency fund – it feels good to have money in the bank!
• Getting out of debt – pay off all those bills!
• Planning for the unthinkable – get your affairs in order before something happens!
• Creating a nice little nest egg – live with dignity when you retire!

I promise to address each of these topics in a down-to-earth, old-fashion way.  I will keep it straight-forward and easy.  I didn’t think this stuff up myself, but I know it works because I have used it to manage my own finances for several years now.  I will also point to others that give the same advice just so you know you can trust what I am saying.

Don’t miss any of these financial wisdom articles!

As always, all of my articles here at MySuperChargedLife.com are 100% free with no strings attached! 

Here is my first nugget of financial wisdom to share with you – Do not pay for things that you can get for free!

Simple enough?  I thought so.  However, there are a ton of people everyday that pay large sums of money to get this same advice. 

I guess they perceive they are getting something better or more trustworthy because they are paying for it.  However, I have found the truth to be just the opposite.  I have found that the best advice is usually free.

Therefore, I encourage you to sign-up today to receive my articles absolutely free.   You can get them via your favorite RSS reader or in your e-mail inbox.  This will ensure that you never miss an article!

Please share this with others so they can learn to take responsibility for their finances! 

Leave me a comment and let me know if there are specific topics you would like me to write about.

Photo by Rob Lee

You would have to live under a rock to believe that things aren’t going to get worse before they get better.  I’m not one to go around telling everyone the sky is falling and that’s not what I’m doing now, but we all might have to cinch up our belts a notch before this financial crisis is over. 

We are going to pay for these mistakes

Back in April, I wrote Subprime Mortgage Crisis Is Going To Cost Us Money.  Well, here we are in September and one way or another, many of us are going to end up paying for this mess.  Of course, I have not been the only one writing about this, in fact, as Ron points out, The Mortgage Meltdown Signs Were There All Along.

As a result, there are several articles about ways to be more frugal.  For strictly financial concerns, I’d suggest taking a look at these:

We Don’t Need No Stinking Bailout Plan @Frugal Dad

Nine Things to Do When the Going Gets Tough @The Simple Dollar

Of course, there are concerns beyond just the economy on many people’s minds.  This crisis is likely to have long and far-reaching effects beyond just its financial impact.

Success is mostly about attitude

It is true that the economy is struggling right now.  However, winning financially or at anything else in life is not about external circumstances.  Some people make money and lots of it in tough economic times.  Regardless of your circumstances, you can come out smelling like a rose if you approach the situation with the right attitude. 

Our attitude about something defines our behavior toward it.  If you are experiencing repeated difficulty in any area of your life, it is likely because you have the wrong attitude toward it.  This is true in finances, marriage, your career, raising a family, and every other area of life.  Get the right attitude and you’ll be amazed how quickly you can turn things around.

The attitudes that will help you survive and thrive

So, what are the right attitudes to successfully navigate the hard times ahead?  Well, I believe there are a number of them that will help you.  Here the ones that I’m adopting to ensure I survive and thrive:

1.  Let the mistakes of the past go.

Hanging on to the sins of the past keeps you from moving forward in life.  It takes your eye off the ball which prevents you from hitting the next pitch out of the park.  Forget about what happened yesterday.  Concentrate instead on what needs to be done today to get things headed the direction you desire.

In the current financial crisis, it is easy to get bogged down in whose to blame.  However, for those of us removed from the situation, this does little good.  Getting steamed at the bankers, politicians, or at the people that took out loans they couldn’t afford will only distract you from what you need to be doing.  I suggest forgetting about all that.  Let someone else worry about it.  Delegate that job to your Congressman.  There are other things closer to home for us to think about right now.

Keep your thoughts in the present and look to the future if you want to survive tough times in life.

2.  Stay calm and control your fear.

Fear makes people do some really stupid stuff.  Fear will cause panic and panic seldom leads to productive action.  Do not let yourself get caught up in the hype and sensationalism of the circumstances that arise in life.  Keep yourself calm and thinking straight.  Be the voice of reason and you will prevail.

There is a lot of fear brewing right now about the economy.  People seem pretty nervous.  Of course, the media is doing their best to stir everyone into a frenzy.  This really will not help.  In fact, it is highly counterproductive.  If there is anything that will make this financial crisis worse, it is fear. 

Do not let yourself be sucked into the hype so that you do something really dumb.  I don’t know how bad the economy is going to get.  The situation may stabilize or it may get a lot worse.  Either way, don’t rush to judgement, seek multiple opinions, and make rational choices weighing all possible outcomes.  This will help you to come out on top.

3.  Be willing to go the extra mile.

Difficult situations are not the time to hunker down.  On the contrary, it is time to come out and pitch in to achieve positive results.  Tough times call for hard work.  Do not be afraid to roll up your sleeves and dig in.  Everyone values the person that makes a positive contribution when the chips are down.

As this economic scenario plays out, you are likely to have financial challenges at work and at home.  Do not shy away from these.  Determine what your role should be and then double your efforts in that direction.  Face the challenge head on.  The progress might be slow, but it will make a difference.  This could save you your job and your marriage.

4.  Accept the need to make sacrifices.

Getting through a tough time usually requires making some sacrifices.  The quicker you open up your mind and consider all the possibilities, the better the outcomes you will experience.  Do not hold onto a situation that is not working for you.  I know that it is often difficult to make sacrifices, but these are usually small prices to pay to avert total disaster.

In this financial downturn, you might need to sell that pretty new car you just bought to help make ends meet.  You might need to get a second job for awhile to generate some more income.  You might need to get on a written budget and stop spending more than you earn!  Do not wait too long to make these adjustments.  I know they will hurt a little, but if you want to succeed, you will do what it takes to win.

5.  Do not give up even when it gets hard.

Whatever hardships you face in life, never give up!  I know that it can be overwhelming.  I know that there may be days that you simply do not want to get out of bed.  However, I also know that every positive step you take gets you a little closer to being back to normal.  Every day that you do the right thing is one day closer to the results you want.  Many people give up when the prize they desire is just around the corner.

This financial crisis, whatever it turns out to be, will not last forever.  We will turn things around.  America has enjoyed some of the greatest prosperity known to history since the Great Depression.  If we adopt the right attitudes, conduct ourselves appropriately, and persevere, we will come out of this in great shape!

Hard times reveal your true character

Do you have what it takes to survive and thrive in tough times?  It is when we are tested that our true mettle shines through.  I believe the attitudes above exist in all successful people.  Sometimes they lie dormant, but when the situation calls for it, they surface again.  Be strong!  Prepare yourself and your family to face whatever challenges life throws your way.  Don’t wait for the storm to hit full force before you get your thinking straight.  Those that have the right attitude will come out on top!

Photo by epicharmus

Why be concerned about the subprime mortgage situation?

Okay, so I don’t have a subprime mortgage and neither do you, so why should we care about this impending "crisis"?  Well, in another article from CNN Money, we find that Congress is getting ready to spend our tax dollars to bail people out of their impending foreclosures.  Of course, in their usual style, the politicians may be spending our money on a hopeless cause.  They are proposing legislation to federally guarantee the refinancing of a lot of these loans that are in default.  I can’t believe this!  The subprime borrowers made bad decisions that ruined their credit to the point that they couldn’t get a regular mortgage and then they made another stupendously bright financial move in taking out a subprime loan and now we, the taxpayers, are going to guarantee they’ll pay in the future.  Does something seem wrong with this picture to you?

Why are so many subprime borrowers delinquent?

The terms of most subprime mortgages are crazy!  They generally have an adjustable-rate which means that after a short introductory period of 2 to 3 years, the rate gets adjusted upward every 6 to 12 months.  Some of these loans even give the borrower the "opportunity" to make interest-only payments during the introductory period.  After that, the balance of the loan is recalculated at a new higher interest rate.  Once the adjustment occurs, the payments usually go up substantially often by as much as 50%.  This is where subprime borrowers get in trouble.

What kills me is that the borrower was a poor candidate for a mortgage in the first place because they couldn’t qualify for a traditional mortgage.  Then the bank hooks them up with one of these really nice adjustable rate mortgages.  Let’s face it, these people already had a poor track record for managing their money and now the bank thinks that they are going to plan, prepare, and be ready when their mortgage adjusts after a couple of years!  I have no sympathy for the borrower or the lender in these circumstances.  It seems just plain stupid to me.

But wait, there’s more.  As if the adjustable-rate mortgage (ARM) wasn’t enough, subprime lenders came up with another jewel that is killing them now.  They set some of these loans up with a balloon payment at the end of the introductory period.  This makes the entire balance of the loan due in one lump sum at the end of the first two or three years!  Of course, the idea is that the loan would be refinanced, but again subprime borrowers are not good money managers so, this often doesn’t work out. 

Should we bail out subprime borrowers and lenders?

I’m really trying to get this straight in my head.  What were these people thinking?!?  It is often said that it takes two to tango.  Well, to me, this is the case with this so-called subprime mortgage crisis.  The borrowers and the lenders were stupid.  They both knew the situation was risky going in.  How is it that neither side saw the writing on the wall?  I guess the borrower was blinded by their desire to own their dream home and the lender was blinded by the potential profits.

Of course, there is another side to this argument.  If we don’t bailout these knuckleheads, then it is likely that the price of homes will continue to fall.  Our homes will depreciate because the market will be saturated with thousands of homes at bargain prices.  In addition, all of the foreclosures could cause some lenders to collapse.  These things will create all kinds of ripples through the economy.  So, the problem is complicated.  The damage is done.  Either way it is likely going to cost us some money.

Still, I am against the idea of using my tax money to bailout people that made stupid choices.  I believe in personal accountability.  I think that both the subprime borrowers and lenders should have to bear the burden for their mistakes.  I am prepared to ride out the results.  I do not want Congress to throw billions of dollars of my hard earned money toward fixing something that should have been avoided in the first place.  Hopefully, this will teach both sides of this debacle to make wise choices with their finances in the future.  I urge you to contact your elected officials and discourage them from pursuing this bailout.  Make your voice heard!

What can we do to avoid the pinch of the mortgage crisis?

Of course, whether Congress moves forward with their plan or not, this is probably going to cost us all some money.  So, what can we do?  We can use some of the same techniques to ride out this storm as what we might use to prepare for any financial downturn.  We should:

1. Lower spending and increase savings.  (live below your means)
2. Payoff debt
3. Save 3 to 6 months of living expenses in an emergency fund.
4. Plan to hold onto your present real estate until the prices rebound.

If you are doing the right things financially, then this will only be a mild speed bump in your financial future.  However, for those caught up in the crisis, it could be quite a nightmare.

What are your thoughts on the subprime lending crisis?  Leave me a comment and let me know.

Photos by joelogon and Storm Crypt