Posted By Paul
This is an article I found on CNN Money that I thought did a great job of addressing the "moral hazards" of money. There is lots of info out there on how best to deal with your money from a fiscal standpoint, but this article addresses what you should do from a moral standpoint.
I liked the fact that the article highlights the idea that you shouldn't feel too guilty about the financial impact of dropping a service (housekeeper, landscaper, etc.) if it's a service that you can't afford right now. I also liked the fact that it specifically calls out that when making choices your first obligation is always to the loved ones that you support.
I also liked the fact that it mentions the idea that helping someone out of a financial bind isn't always helpful in the long run. This reminded me of a previous post:
Millionaire Next Door Review Pt 3: Economic Outpatient Care
The idea that by helping someone out of a financial bind you are shielding them from a lesson that perhaps they needed to learn.
Here are some highlight quotes from the article:
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Where should your budget ax fall?
But there are three principles to keep in mind. One is that sacrificing is a necessity, not a punishment. It's to be expected of everyone, and you can't feel guilty about not underwriting what you can't afford. Second, family comes first. As concerned as you may be about your housecleaner -- or your favorite charity -- your first obligation is to the loved ones who depend on you.
Finally, remember: Opportunity is priceless. Sell your jewelry, sell your car -- whatever you need to do to be able to invest in your child's future.
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What do you do about budget-busting friends?
There is absolutely no disgrace in looking a friend in the eye and saying, "I'd love to do that, but right now I can't afford to." If your pals aren't understanding, shame on them.
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Who should get your bailout bucks?
As for others more worthy, try to help them (a) if you can and (b) if their request seems reasonable -- reasonable to ask of you and reasonable in that the situation genuinely merits intervention.
The quotes make more sense in context of the full article:
Do the right thing in a recession
Friday, June 26, 2009
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2 comments:
I agree with the article to a certain extent. I don't agree with this portion all the way: "Finally, remember: Opportunity is priceless. Sell your jewelry, sell your car -- whatever you need to do to be able to invest in your child's future."
Yes, it is important to invest in your child's future, but not to the extent of the parent's future. If the parents have not fully secured their financial future (for example, they have not fully funded their retirement), then the child's college funding can be put on hold. After all, a child can always get lower cost tax deductible financial aid for college. A parent is harder pressed to find financial aid for their retirement - and is not low cost and is certainly not tax deductible.
Andrea
Save Money to Make Money
I also thought that point was on the extreme side, and I completely agree that one of the best things you can do for your child's financial future is to secure your own.
Thanks for the comment!
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