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How's your personal economy doing?

J.D. Roth

Tess Vigeland: And before we leave this notion of dealing with macroeconomic uncertainty by fixing your own microeconomics, let's hear from commentator J.D. Roth.

He's not concerning himself with the markets or the media coverage. He's paying attention to something else.


J.D. Roth: Everywhere I go, I hear news of financial doom and gloom. The stock market is crashing! The dollar's inflating! Oil is peaking and homes are foreclosing! It's 2008 all over again.

Well, maybe it is, and maybe it isn't. I don't know. What I do know is that I've learned some lessons from past meltdowns. The national economy may be sinking, but my personal economy is ready to weather the storm. What do I mean?

First, I have no debt. I carried consumer debt for nearly 20 years, and every time the economy sputtered, I worried what might happen if I couldn't make my monthly payments. Being debt-free lets me sleep well at night.

But it's more than that. I now have emergency savings. And I keep my expenses well below my income. Meanwhile, my investments match my risk tolerance. A big chunk of my retirement is in bonds because the ups and downs of the stock market make me nervous.

So, now I'm able to ignore the bleak economic news and live my life as normal. I'm not sharing this to brag. Yes, it's important to pay attention to the financial news. But my goal is to show that while the national economy does affect us, how we handle our personal finances is far more important.

Many of my friends have learned this too. After losing jobs during the last downturn, or selling stocks in a panic when the market dropped, today the people I talk to are much more stoic. Or pragmatic. Or smart. They too have paid off debt, built savings and developed investment plans.

This is my mantra: Nobody cares more about your money than you do. When times are flush, you need to prepare for an uncertain future. Then when the next crisis comes around, you can remain calm while the stock market tumbles and unemployment rises and inflation rears its ugly head.

We can't change the national economy -- but we can control our household finances. Ultimately, each of us is responsible for the health and growth of our own personal economy.


Vigeland: J.D. Roth is the founder of GetRichSlowly.org. Send us your comments or leave them on our Facebook page.

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Thank you so much for finally putting on a guy who has common sense when it comes to managing personal finances. I have to tell you that a lot of the advice I hear on your show has holes in it (i.e. when someone calls in with a question, your advisors don't always ask the right questions before they spit out their advice). So I was very happy when I heard J.D. Roth's piece, because it makes total sense and it is the same way I manage my finances: with no debt (other than my mortgage at this time, which I'm striving to pay off ASAP), and living below my means, investing for the long term, which should be normal, but it is so not in this country. This essay made me think of Dave Ramsey and his teachings on personal finance. You should have him on the show more often. Thank you.

My saying before I buy a new gadget, is does the old gadget work and will it do the job.

If I ask myself "Is it good enough and will it do the job" if the answers are yes to both then do not buy the item.

I enjoy listening to your show on public radio and your special show last Thursday evening, 8/25/11. It was an eventfull day, after 17 years my company laid me off with 10 other workers after losing their number 2 client to a competitor. I thinking about what I want to do next in the medium size town of Roanoke, VA.

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