As the old year draws to a close and a new year is about to dawn, I like to take a few moments to look back on the past year and to reflect on what went right and what went wrong, how things have changed and whether those changes were for the good. I am sure that most of you do the same, especially those of you who, like me, are old enough to realize that if we do not adapt and adjust how we approach our lives, our lives tend to get out of hand.
A year ago, I was gainfully employed working for a $2 billion company. I held a respected position and was highly paid. As this year ends, I am unemployed and trying to find a comparable position in an economy that is far from healthy and where layoffs are far more common than hiring. My home is worth at least 20% less now, as compared to a year ago and probably close to 40% less than it was at its peak value about 2 years ago. My retirement account is worth about 60% of where it was back in April and the stock market is still not showing signs of revival.
From a financial perspective, it has been a bleak year but in so many other ways, it has been a good year. I have been able to spend the past year clearing my mind of all of the clutter that had accumulated over 15+ years of practicing law. I know that when I do find a new position, I shall be able to go into it in a healthy frame of mind, ready to take on new challenges. Because my wife and I had a large amount of our assets in savings accounts, we are still comforted that we have enough money in stable investments that we can live securely for a few more years, knowing that I shall find new employment well before our resources run out.
We have also learned from the past year that we had been far more wasteful than we realized during all of the years in which I had been employed (and especially during the years when my wife had also been practicing law). Just by following my own advice, we have saved hundreds of dollars each month. Some of the savings have been small, as when we use cloth napkins instead of paper napkins and others have been more substantial, as when we saved a couple of hundred dollars by participating in a program offered by our utility company. What we have learned, however, is that we can save a lot of money by being intelligent and not have it affect our quality of life in any meaningful way.
The New Year will bring new changes, and I both hope and expect that they will be for the good. When, the fates willing, I sit down to write about 2009, I expect that I will be recalling the adventure of beginning a new job and the challenges of being with a new company after having spent so many years with my past company. I also hope and expect, however, that my wife and I shall not forget the lessons that we have learned this year. We will continue to be thrifty, but not selfish, and frugal, but not Spartan.
Our economy will improve, whether that has already begun to happen or it takes another several months to begin. When we return to a strong economy, how will you react? When raises and bonuses are more common and growth prevails over layoffs, will you spend less frugally? Will you forget the lessons learned in this year of greater economic adversity? For that matter, have you fully embraced a life of smart spending or do you still have steps that you can take to stop being wasteful?
With the New Year upon us, what are your savings resolutions for the coming year? Will you strive to save more or to find ways to spend more? Have you become so frugal that you do not enjoy life to its fullest or do you still find yourself spending in ways that you regret? When a strong economy returns, as I feel it must, what will you have truly learned – and remembered – from the current economic downturn?
And to all of you good people who visit, I wish you the very happiest of New Year’s and offer you my most sincere wishes for a happy and prosperous 2009!