Lessons from the U.S. Debt Debacle

Months of doom-filled predictions, public debates, people scrambling to protect themselves from disaster.

Remind you of anything?

No, not the recent debt ceiling debacle, silly. We’re talking about Y2K: widespread hysteria that engulfed the final weeks of 1999, forcing even the skeptics to store duct tape and canned food.

Flash forward to 2011 and… you barely remember it. Add that to your arsenal of financial wisdom. Most people live and breathe within pretty long time horizons as far as money is concerned. It may not feel that way when you look at your bank balance, mortgage payment and impulse yard sale purchases from this past weekend.

But when you think of yourself as a long-term investor in all aspects of life—from your 401k down to your kitchen curtains—it becomes easier to weather money madness:

Stay informed, but don’t buy the hype.

Stick to your plans (pay back debt, save, make potato salad for the potluck).

Avoid sudden moves (don’t cash out IRAs, sell assets, or buy gold).

By and large, women tend to be less reactive than men are, at least to market jumps and dips. According to one Vanguard study, this wait-and-see instinct may protect you financially.

Let’s hope so—and in another 10 years, you won’t remember this “crisis” either.

Sit still. What have you learned from the debt ceiling/downgrade mess?

photo source: Charles Dharapak / AP

Join the Discussion