In previous blog posts I’ve expressed hope that our economy’s recent difficulties might support a refocus of financial priorities, most of which I think would be good for our long term success, happiness, and capacity.
In previous blog posts I’ve mentioned how many of my clients are talking about how they want more realistic goals, how they want less complicated lives, how they want more financial security, and how they want “old fashioned” financial discipline and habits. I cannot be the only one seeing this because check this out:
NEW YORK (CNNMoney.com) -- Americans have paid off nearly $1 trillion in debt over the past two years, according to a regional Federal Reserve report released Monday. Total consumer debt was $11.6 trillion as of Sept. 30; down 7.4%, or $922 billion, from the peak reached in the third quarter of 2008, according to the Federal Reserve Bank of New York. "If consumers can continue to repair their balance sheets, that bodes well for the sanity of the economy in the long term," said economist John Canally of LPL Financial.
If as a nation we want our companies and our governments to change their financial behaviors and fix their balance sheets, I am convinced that the best way to do that is to do it at home first. If more responsible spending and use of credit begins in each household, it will not only become a part of our national consciousness but it will become the only acceptable model of a long term strategy. You are what’s called a “leading indicator” because your behaviors predict what the economy and your government will be doing.
When we ran up our personal debts so did the companies we invest in and so did our government, as they are collective reflections of all of us. So let’s see what happens when we reduce our total personal debts! Anyway, $1trillion! This is very big and very good news!
