Are You Disheartened By This Election Season?

October 28, 2016

After watching all of the political debates, I am both disheartened and encouraged. As much as I am disheartened at this point, I’ve always been a big fan of finding reasons for hope and optimism. Don’t let obstacles outside of your control impact your life. Here’s why:

Stock markets rise. Stock markets fall. We know this (or we should).

Yet every time the stock market has a rough week, I field calls from nervous investors. People who see their 401(k) balance go down every day for a week or two tend to want answers. We talk with them about their long term goals and their current asset allocation. At times, they are invested in a way that is either way too aggressive for their stage of life and their goals and at other times (and fewer in frequency), they are invested more conservatively than their stage of life and goals would indicate is appropriate.

Most of the time, though, they are invested in a way that is perfectly suitable. In those cases, we talk about patience and allowing the market to do the rising and falling that it always does without getting too emotionally invested. They can’t control the markets, but they can control how they react to changes in the markets.

Similarly, whether the economy is great (remember when that used to happen?) or lousy or just muddling along like it has for the last 7-8 years, no one individual (not even Janet Yellen) can control the overall US economy.  Even less control can be exerted over the global economy. The one thing that we can control to a large extent is our “personal economy.”

How much are you contributing to your 401(k)? How much are you saving in other accounts on a regular, automatic basis? What’s your level of spending in relation to your income? These are things we can totally control.  

Those who examine their financial habits and lifestyle will find that their personal choices control a great deal of their financial life. The great thing about choices is that they aren’t permanent (kinda like elections) so if we’ve chosen to spend 102% of our income over the last few years, we can decide to spend less, move to lower cost housing, drive a lower cost car, cut the cable cord, etc. If we haven’t saved enough in our 401(k), we can increase our contribution every year. If we don’t have a solid emergency fund, we can direct deposit $5, $10, $20 or more to our savings account with each paycheck. The amount isn’t as important as the momentum.

So let’s use this season of disheartening political shenanigans to focus on our own personal economies and make progress on our goals. My challenge to you is to pick one area in your financial life, one where you DO have control, and before election day, make one change to your current habits. We can’t change the national economy, but we can change our own.