Your Economy vs. The Economy

Recognizing the distinction between Your Economy and The Economy is key to financial sanity. It will help you see opportunities and avoid common mistakes.

The Economy is determined by factors that individually we cannot control. It includes forces like supply and demand, market volatility, global shifts, technical innovations, and the job market.

Your Economy is determined by your circumstances and how you respond to them. The economy may have an impact on the choices you make but your economic outlook is based on your income, your spending, your priorities. If you focus on your economy, you greatly increase your chances at having the financial wherewithal to weather storms in the economy. It also increases your ability to take advantage of possible opportunities that economic shifts provide.

The challenge for each of us is to manage our economy in a way that will allow us to survive and thrive regardless of what is happening in the economy. We intuitively know it. But constant news alerts and headlines try to convince us otherwise. We do best when we focus our efforts on what we can control. I can’t control the price of eggs. I can control my choice whether or not I purchase them. I may not be able to change the job market, but I can focus on my professional development and improve my marketability in the market. I can’t control interest rates, but I can control how much I spend on a credit card. You get the point.

Once they learned it would generate clicks, advertisers, newscasters, politicians and pundits have hitched their messaging wagon to the economy. One pundit points to one number and says the sky is falling. Another reports how sunny it is. No matter how good or bad it is, there is always an advertiser saying it’s the best time to buy gold, or whatever it is they are pitching.

Yes, what is going on in the economy matters. What you do, matters more. In fact, it is what matters the most.