Tuesday, August 2, 2011

Crisis over but we still need to go to the ant

Faced with bankruptcy because there was not enough money to pay the credit card, the US has averted crisis by agreeing to increase their credit limit, borrow some more and keep paying the minimum monthly charge. The world sighs with collective relief but the problem has not gone away. The solutions seem politically unattainable but any understanding of Personal Finance 101 would suggest that the real answers are simpler than imagined.
If a person was faced with such a dire fiscal  outlook, they really would have no choice but to consider the only rational strategy. Firstly, they would have to look for more work to increase their income. And secondly they would have to start spending less than they earn, in order to decrease their debt and so bring their personal balance sheet back into order. The US solution, while unpalatable, is clear: they have to increase taxation and reduce spending. Politically it may seem impossible but surely there is no other solution should the debt just continue to grow.
Often in our personal lives the solutions to our problems are closer than we imagine. But we, like the USA, baulk at the hard work and pain that may be involved. If our weight is out of control we are faced with a simple solution: we need to eat less and exercise more. If our personal finances are out of control, we need to earn more and spend less. If a husband’s marriage is on the rocks, again the situation may seem impossible. But a costly commitment to worry much more about her needs and overcoming his faults can be so much more effective than a lifetime of obsession with his needs and her faults.
The Book of Proverbs in the Bible is filled with the sort of wisdom that may seem at first glance to be full of over generalisation and naivety. But the wisdom of the Ancients deserves consideration when our regulated, medicated, bureaucratic and complicated age seems intent on making sure we never face any discomfort or pain. Even the simple wisdom of looking at the ants deserves more than a passing glance. Not everything can be solved by hard work and discipline, but maybe more solutions are staring us in the face if we are willing to make the sacrifice and do the work.
“Go to the ant, you sluggard; consider its ways and be wise!  It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest. How long will you lie there, you sluggard? When will you get up from your sleep? A little sleep, a little slumber, a little folding of the hands to rest —  and poverty will come on you like a bandit and scarcity like an armed man.”  Proverbs 6: 6-11

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