Various news sources last week reported that inflation-adjusted median incomes haven’t increased since 1995. The recession is partly to blame, since many higher paying white-collar jobs are gone. Over the past 20 years many factories have moved overseas, so higher paying blue-collar jobs are rare.
As if those challenges aren’t enough, those with modest incomes have a tougher uphill battle than ever before. Gasoline has doubled in price since 2009. Grocery costs have gone up, and package sizes have come down. Many people living on the margin are driving older cars, needing more repairs.
Health insurance costs climb at rates faster than inflation, and with higher deductibles common with many plans, consumers have to pay more out of pocket. Many people don’t have health insurance even though Obamacare was passed (but it will not be fully implemented until 2014), and still business owners haven’t really figured out how to pay for benefits for low income and uninsured workers. So many modest and low income people continue go without regular health care, so they must pay everything out of pocket.
I know many people that are going back to college to get degrees in nursing or computers in order to find better jobs. Yet college costs have increased way beyond normal inflation, and many people graduate with burdensome loans. When financially strapped with debt, many exhaust their savings and are forced to use credit cards and check-cashing stores. Those with modest incomes and the poor are further hit with high interest rates, making it all the more difficult.
Is Obama or Romney coming to the rescue? Well I have been listening closely to both presidential candidates, and I hear they are concerned about all these challenges, yet I haven’t heard either articulate about their actual plans; their rhetoric remains abstract.
With all of these challenges, Financial Diligence is required more now than ever. Politicians and government in the end might help some, but it will take quite a long time. To make changes to present circumstances, it is up to me and you.
- Making personal finances a priority
- Committing time to do banking and budgeting
- Investing time and money to take a class, e.g., Dave Ramsey’s Financial Peace University
- Being smart and wise with decisions
- Planning shopping trips and putting limits on grocery buying, eating out and entertainment expenses
- Not borrowing for consumer goods
- Saving for emergencies
- Getting cost savings books from the library and implementing homemaking cost reduction measures
- Obtaining advice from a financial coach about all areas, and especially before all major expenses
- Being a great employee–learning extra skills or going back to school, and asking for more work when you have down time
- Lastly, praying for wisdom to make good non-emotional decisions, and asking for all kinds of heaven-sent help for such things as financial miracles, raises, jobs, and good health for you as well as for your possessions that might break down and require budget-breaking expenses
Conclusion: The challenges are greater now than ever, yet it is not hopeless; it just requires greater concentrated Financial Diligence. You are smart, intelligent, and gifted; you can do it! You will repay debt, make more money, accumulate savings, and have more for good and fun things in the future. Don’t be discouraged–I have seen it happen to people over the past few years as they endure and improve through difficulty.