Stages to Personal Financial Awakening

Dear readers, first of all, I would like to apologize for the massive lack of postings. The reason being that I am starting up a new company of my own and have been so damn busy settling administrative issues. I will still try to post as and when I can so don't write me off just yet. =)

Anyway, today I would like to talk about the stages we would all eventually go through before our financial eyes open. So without further ado, here they are:

Stage 1 - What?
This is the stage where we know close to nuts about personal finance, we save minimally or not at all, we don't invest, we spend a hell lot of things we do not need and we might even be in  plenty of consumer debt.
We are basically clueless and lost, living life a day at a time or pay check to pay check.

Stage 2 - Oh Snap!
One day, you realize that living life this way is not for the long term. This is the road to financial Armageddon. Thoughts, questions and ideas start forming in your head. How am I going to reduce my spending? How am I going to save more? Will I have enough when I eventually stop working? Is my CPF enough to sustain me?
The credit card debt is taking away so much of my salary! This is the stage where you have awakened, there is now growth is your financial body. You start to save more, spend less and study and learn more about investing. You pay down your debts with the amount you would have otherwise spent.

Stage 3 - BAM ( Kenna Stuck )
Some time into you awakening, you might run into a pit of tar. Stuck and not moving anywhere. Everything is taking too long. You start questioning whether the sacrifices you are making are worth it. You start missing spending money without a thought on your budget. You start missing going out with your friends all the time. What happens next is highly dependent on what you do at this point. Do you have the will power to struggle and break free of the tar pit, or will you give up and be stuck there forever?

Stage 4 - 2nd Awakening and realization
This is where you will end up should you break free of the tar pit. You will realize that in everything, there must be balance. Putting too much money to either savings or spending is not healthy. We should not be sacrificing too much currently to enjoy in the future. Neither should we be spending too much now and suffer in the future. Finding that balance is not easy and we must work at it constantly. We should be frugal, no cheap. Spend on things that have value and not things that serve no purpose in enriching your life of the lives of your loved ones.

Stage 5 - Stability
You have found your balance point. You are happy and contented with what you have achieved. Additional money could now be used to buy yourself additional time. Be it retiring early or having less days to work a week. Even at this stage, we have to constantly work at improving our personal finance. Balancing work, play and family.

Remember that asking "are we there yet?" a million times will not get you there any faster. We have to work hard and plan wisely in order to do that.

As always, save more, spend less and invest wisely.
P.