Yesterday I mused about the US government shutting down (click here) and now watching CNN I am struck by the fact that they actually did it. So now what? The US government will be able to work out a deal and turn the lights back on but until that happens this makes for interesting conversation. How does a first world country turn off the lights? How does the one of the most blessed countries in the world call it quits? There are layers and layers of reasons that go way back in time however is it really that tough to figure out?
There are people who say this is dirty politics but when I reflect on what I do everyday helping people and businesses with their mortgage and loan decisions I still think the issues are simple. When people are living outside of their means and have done so without regard for consequences they lose sight of the basic problems. They focus on the noise and all of the mounting issues instead of stepping back and looking for the common thread. When a business has not fixed its cash flow problems, it will blame customers, suppliers, markets, etc. instead of drilling down to figure out the root problems which most times are expenses that exceed income. This is a simple problem to identify but a much larger problem to fix. The reason it is hard to fix is because you have to challenge the common thinking and mostly likely will have to institute change. Not many people like change.
Borrowing money is not the problem. It can be a help or a hindrance depending on whose in control. Is there a plan for repayment or is it filling in a gap that is reflective of other problems? Because it has been so easy to borrow money in the past decade the idea of stewardship is a lost art (click here for Wikipedia definition).
It will be interesting to see where this goes but as you watch the events unfold with the US government, consider your own finances and see if you can get ahead of any coming “shut down”.
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