What “ripple effects” are happening in your financial life right now? Can you change them?
Yesterday The New York Times featured an article about people first losing their homes and then losing their possessions because they cannot pay for their storage units. (Here’s a link to the mobile phone version of the story).
A “ripple effect” occurs when something happens and the consequences spread out to touch and affect other areas, often unintentionally.
Some examples in your financial life might be:
Not paying your bills on time, every time….which sinks your credit score….which makes it more expensive to borrow money for large purchases….which makes your new bills even higher.
That’s one ripple effect cycle to avoid! Here’s another:
Not investing small amounts when you can….missing the advantages of dollar-cost-averaging….requiring more savings and/or higher, riskier returns to live comfortably when you’re older and cannot work.
Phew! Sounds terrible! But couldn’t ripple effects in your finances also be positive? Consider the inverse of the two examples mentioned. Or, consider these shifts in behavior that can dramatically change your financial life:
Figure out where you spend all your money….create a budget to maximize your resources….meet your financial goals.
Or another good one:
Get out of debt….feel more confident and in control….be a happier person.
Choose your moves wisely. Your financial behavior will allow you to enjoy ripple effects we all want — those that keep getting better and better.
