Pimp Your Finances

I’ve been lucky in that the economy has only had a mental – and not financial – impact on me. However, I feel like I’ve already learned some lessons.

I’m even more thankful for my job than normal

I always try to be thankful for the blessings and advantages I’ve been given, but I’m even more appreciative now. I know a lot of people are not as fortunate (like the 53,000 Citi employees that lost their job today).

Debt is a prison

Although my credit card debt is manageable and I’m paying very little interest, I feel like I’m in chains because of it. Recently, I’ve been losing sleep, thinking of it when I wake up in the night.

I feel like if a financial crisis came up, my wife and I could manage – if it wasn’t for the debt.

I’m a bigger believer in emergency funds

I’ve never been in a position where it made sense to have an emergency fund. I have debts with interest, so I always put extra money towards that first.

Even in theory, I didn’t think much of emergency funds. Maybe as a little bit of padding, but nothing more than that. I always thought it makes more sense to put the money somewhere that is not readily available, but generates higher interest.

To some extent, I bought into the idea that if an emergency came up, I could always use credit cards. Or withdraw from a Roth IRA (assuming I had one).

But now I realize that having an emergency fund can equal peace of mind when the economy is troubled, and there are layoffs in the air.

I’m not prepared for a recession

My house and my well being could be in danger if I didn’t have a job. I feel like I was responsible in choosing a house, but my debt and lack of emergency funds threaten my finances.

I am not happy with where I’m at, and it’s stressing me out. I’m going to do everything I can to turn things around, so that by the next time the ecomony turns sour, I can safely and calmly ride it out.