I was recently on a lengthy cross-state drive with a few family members that took us through miles and miles of farmland. Along the way, my brother in law asked “What do farmers do in winter?” Now, I’m no farming expert, but I always like to share my ideas as possible answers when a question is asked. I told him my guess would be that they live off of what they made in the summer and harvest season and perhaps relax a little. That question made me think about the summers and winters in our financial lives.
During the summer and harvest seasons is when farmers make most, if not all, of their money. (Again, I’m no farming expert – I’m just taking a guess). Being aware of what the seasonal change does for their crops however, they know not to spend all their bounty at one time because they will need some of that to sustain them through the winter until the next harvest. Aside from the changing of the seasons, farmers also know that crop supply and quality can vary from year to year, bringing abundance one year and possibly lack the next.
I believe we have similar patterns in our own finances. We have summers and winters and good years and bad years. There are times when have well paying jobs, we receive bonuses, we have extra opportunities to make money, the stock market does well, nothing breaks down and things look peachy. Then there are times when lay offs occur, a sickness in the family comes, a car (or 2) break down, prices go up all around and the stock market goes down. Whatever it is, chances are you’ve gone through something on both an up and down swing. The key to how you deal with the winters and bad years is what you do in the summers and good years.
When things are going well and money is abundant, what do you do with your money? Do you rejoice in the fact that you have so much and buy a bunch of things? Perhaps a new TV or a new car or the latest gadget? Irresponsible people tend to spend their abundance. Huge tax return? Let’s buy a home theatre system! A few months later when money is tight it’s usually “we don’t have enough money for