Should you be financially conservative?

Should I be financially conservative? This is a question that every person needs to answer (and to be sure they don’t confuse it with fiscally conservative, which deals with government spending and tax policies)

Realistically, it makes more sense for you to be financially conservative since it means that you are more cautious about the way you handle your finances and the way you invest your money. A financially conservative person will handle their budgeting the same in a good economy and in a bad economy. They may decrease the amount they spend when the economy is not doing as well. When you are financially conservative, you are careful with your money and you operate with a solid plan that you can follow. You work to minimize the risks. When it comes to personal finances, you are financially conservative when you plan what you want to do with your money. It means that you are cautious in your investments and that you do not overextend yourself. It does not mean that you do not invest. Nor does it mean that you don’t do the things you love or dream about. Instead, you save up and plan to do those things.  Basically, being financially conservative means that you are careful with your money. You carefully weigh your purchases and you avoid debt when you can. It means that you have a good plan and that you can execute it. 

The biggest benefit of being financially conservative is that habits lead to building wealth. Someone who is financially conservative is prepared to handle financial emergencies. They have a plan for retirement. They have significant savings and investments and a well-organized plan to hit each of the major financial milestones. A lot of worry goes away when you are financially prepared to handle the unexpected.

Being financially conservative does not mean that you will not run into financial issues such as losing a job or an unexpected medical emergency. However, it does mean that you will have the tools to deal with those problems. This means you will have a solid emergency fund in place as well as the necessary insurance to cover those situations. If you are tired of worrying about money constantly, or you feel like money is just disappearing and you have no idea where it went, you need to set up a solid plan that will allow you to steadily invest and save money. A financially conservative person is looking forward to the future and preparing for the unknown by building a reserve that they can access during an emergency. Your financial plan will include long-term investing and savings goals, as well as a solid budget that you stick to every month. This makes it easier to manage your money. The steps sound simple, but it will take time and work to make it happen. Most financially conservative people have worked hard for years to get to where they are comfortable and can handle situations as they arise. Do not be discouraged if it takes you time to get to that point. 

thebalance