My 5 Money Lessons for '09

As we close the door on a whopper of a year and work on building back our wealth and stability, I want to share some things that I know for sure when it comes to money:

1) I’d rather be the ant than the grasshopper: Live like you make 20% less than you do. Nothing prepares you more for economic ups and downs, layoffs, setbacks, scandals and scams than making sure you can pay your bills and then some. Living rich means living a lot poorer than you really are – it’s not about deprivation, but about building wealth for the long term. Build it well and you can always enjoy luxuries in life.

2) Cash is king. My husband played keyboards for a rock and roll band for almost 15 years—toured the country and Europe and lived off of cash. To this day, successful journalist that he now is, he is still a non-believer in credit card debt. Nothing trains you better to live within your means than living off of only what you have in your bank account. For convenience sake, we use credit cards to pay for day-to-day expenses but pay them off in full every month. Our minds are programmed: cash is king.

3) Hold onto some wisdom from my Dad, a 67-year-old retiree with most of his money in the market: Everything is cyclical. What goes up must come down. So when the market starts heading up into the next ‘bubble’ know what a bubble looks like. When everyone is celebrating, know that the downward slope is just around the corner and make adjustments accordingly. When the market lost a total of 35% off it’s highs this year, I called my dad to check in and see how he was holding up—his response, “Yeah, I’m taking a beating. If the market heads down another 35%, then I’ll just bag some groceries. Until then, everything is cyclical—it’ll go back up.” True d’at, Dad.

4) Be ready for your worst-case money-scenario and you can be ready for anything the stock market, job market or life throws at you. I come from a hard-working immigrant family so I’m ready to do what I need to do to put food on the table—(legally of course). Whether it was when I was trying to build myself back up from a dissolved but devastating starter marriage or ten years later when both my husband and I lost our jobs in the same year, I always prepared myself for worst-case scenario. I could teach. I could wait tables. We could move and downsize. We were ready to do what needed to be done to get bills paid and food on the table. No moping. Preparing yourself psychologically and emotionally for what you may need to do should the money and opportunities run out builds your resilience and is key to not only surviving, but thriving.

5) Money has its limits. In the end, money can’t buy you what you really need first from yourself and those around you: love, trust, acceptance and happiness.

I wish you ALL OF THAT AND MORE in 2009. Happy New Year!