Wise Bread Picks
It’s been in the papers, on TV, and all over the Internet. In fact, if you haven’t heard yet that the economy seems to be recovering, you must have been living somewhere remote or taking a real vacation (in which case, kudos to you). And it seems to be true. Though some economists are tentative and a few disagree outright, the majority of people in the know believe that the worldwide recession has hit rock bottom and we are now, slowly but surely, climbing our way out of the financial doldrums and back into prosperity. Bully for us.
However, most of America (and I would assume much of the world) feels tentative about approaching this with anything other than a wary skepticism. We want the economy to recover, and we hope that it is, but we won’t believe it and embrace it until we see it. The truth is, most of us haven’t seen much change yet, and probably won’t for at least several months.
Since the hunker-down mentality hasn’t proven particularly successful in the past, we have to discover a way to walk a tightrope of a middle line—to actively embrace the recovery while still living with the present mess and acknowledging the fact that we might not erase its effects for quite a while.
As it turns out, most of preparing ourselves for whatever lies ahead comes down to how we think about it. Whether we succeed in walking this line or fall off on one side or the other comes down to how we think about the current economic situation and our places in it. Like Yogi Berra said, 90% of this game is mental.
Some Things to Think About
The economy is not going to recover quickly. We fell, and we fell hard, and now we get to fight our way back up the cliff’s face until we are, once again, standing on top of that mountain. As we all know, falling is easy, but crawling uphill is much more difficult.
What does this mean for us? It may take years for our investments to regain the ground they held before. Jobs might be slow to rebound, as companies have become leaner and meaner as they’ve had to slim down. House prices may not bounce back as fast as we’d wish.
None of that sounds positive, except that at least things aren’t getting worse. Knowing it, however, helps us know how to live in this awkward time of recovery. It helps us plan for the future, because we won’t count on things that won’t necessarily happen. It also helps us know how to order our lives right now, as our priorities will change as the economy recovers.
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Another item to consider: any recovery, no matter how strong, may not undo harm done during the recession. If you’ve filed for bankruptcy or are deep in credit card debt, an economic recovery isn’t going to solve those problems. It might make them easier, but they’re still there. If you took a lower-paying job because the one you wanted wasn’t available, you may have an easier time getting a better job but you’re still stuck with the one you have for the time being
The Attitude Adjustment
Whether you believe it or not, I didn’t say any of that to depress you. It’s the truth of our times, and it’s only when we’re living in the truth that we can accurately assess our own situations and walk that fine line. In fact, that’s one of the big attitude adjustments we’ll need to make if we’re to navigate this situation successfully: live in the present. It’s great that things might improve, and even better when you’re pretty sure they will. If that better situation isn’t actualized, though, you’re better off embracing the situation you have than gambling it all on the future.
Alongside that, don’t expect miracles. It’d be great if the market climbed this fall like it fell last year, but there’s no reason to believe that will actually happen. If we plan our resources to cover a slow recovery, we’ll be pleasantly surprised if things rebound faster than expected but won’t be left disillusioned and disappointed if they don’t.
And the final attitude adjustment we can make is to look back at the lessons we’ve learned during this recession and determine how we want to carry them into our post-recession lives. Most of us have made budget cuts—we’ve learned to spend less in certain places so we can cover our bills. Maybe we’ve learned to make our own food or furniture or clothing. We can let all of that go, relieved that we’re done with it, or we can take it into the future with us, making our lives after the recession different than they were before.
How are you approaching financial recovery? Tell me in the comments below.
