Okay, so you have subscribed to the conventional financial wisdom for some time now, and you’re wondering why your overall financial condition hasn’t improved. You’ve done the right things for little or no result, so what gives.

As it turns out, the conventional wisdom may not be all that wise after all. Many of the things we were trained and conditioned to believe do not, in fact, have the benefits that have been touted. In troubling financial times, as we are experiencing currently, we must rethink what we always assumed to be givens.

For starters, the notion that buying a house is a sound investment should be re-considered. For years it was thought that homes were a slam dunk, because they would never lose value and in many cases, that value would increase with time. That was before the onset of the current housing crisis, with plummeting values, record foreclosures, and new and innovative ways to spell “buyer’s market”. Now we are left with people stuck in loans far greater than the value or their home, or unable to pay the mortgage and losing their home. The once grand American dream of home ownership has become a boulder tied around the necks of many Americans.

Another tried and (until now) true piece of advice has been to avoid opening numerous credit card accounts. And while there is some validity to this even today, the new wisdom is that it doesn’t hurt to have a number of open and active credit cards, provided that you are able to effectively manage your debt. Left unchecked or undisciplined, credit card debt can snowball, leaving you with balances that you will never be able to make a dent in, effectively crushing your credit score and leaving you at a disadvantage when it comes to buying big ticket items.

Don’t worry about student loans. The only thing worse than this advice is the sheer number of people who have taken it, apparently suffering from a transitory illness that allows them to selectively forget that the operative word is not “student” but “loan”. If possible, pay your way through school as you go, avoiding unnecessary debt, and paying off what you do accumulate with the same dedication as you would a car loan or mortgage payment.

Not touching your 401K. There are cases where this actually isn’t a bad idea, especially if you are needing to pay off some high interest debt. Just be sure you don’t go to the well too often and have a solid plan in place for paying back whatever you borrow.

Never use home equity to pay off credit cards. Not necessarily. Credit card interest rates tend to be considerably higher than home equity rates, so there are definitely cases where such action might make sense. The downside is that home equity loans often foster the temptation to fall into a debt based lifestyle, opening you up to eventual foreclosure, bankruptcy, and other financial problems.

One mistake that many married couples make is putting one person in charge of all the money. This author made that mistake, allowing my ex wife to manage our household finances for the bulk of our twenty year marriage. Once we separated, I found myself having to learn a lot of new things at the ripe old age of 44. This is not a scenario that you want to find yourself in.

Before making financial decisions, consider talking to a financial consultant, somebody who does this sort of thing on a regular basis and can effectively guide you through the maze to a profitable conclusion. Not only should you make sure that they are properly qualified to give such advice, but also that you understand the advice they give. Take detailed notes and don’t be afraid to ask a lot of questions.

At the end of the day, you have to understand that it is a new financial world out there, one that requires new ways of looking at things, and new methods by which to adapt and overcome financial adversity.

Author Bio: Darrell is Director Of Content for Leadsbyfone, a lead generation company servicing the flood clean up and restoration industry.

Category: Finances
Keywords: financial, savings, budget, money, spend, necessities