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As I type this blog I’m glued to CNN live election coverage. At 11:20pm, it appears that President Obama will remain in the White House. The Senate will be controlled by the Democrats, and the Republicans will hold the majority in the House. The close results show how conflicted the country is about who is right and what needs to be done.

The upcoming fiscal cliff, implementation of health care reform, disagreements about ‘fair’ taxation and debates about the government’s role in the private sector – these issues are causing high levels of anxiety in many people. Articles and news commentators over the last few weeks have tried to predict various political outcomes, how they will impact the financial markets, and what investors should do in anticipation. But the government has much less impact on our own personal success than we do, and predicting the future is dicey.

Dwelling on the unknown and the things you can’t control will have a negative effect on your well-being. Focusing on what you can control can make a huge difference in lowering your anxiety level. We’ve said it here many times before, but that’s because it works. Doing a few things to put your own financial house in order will help you cope with anything the government does, or fails to do:

Balance your Budget.
We get angry with Congress for deficit spending, but most people have no idea what they need to live on a daily basis. If you aren’t sure what you need to get by for your basic needs, then you really don’t know if you can afford your ‘wants and wishes’ like big trips, helping your kids out, and other things that come up in our lives. If you know what you need, you are better able to determine how much you have to have in your portfolio to feel secure and how much risk you can afford to take with your investments.

Manage your reserves.
Social Security may run out and Medicare is in critical condition. Your personal situation should not be as dire. If you know what you need to live, and what you want to spend over the next few years on ‘wants and wishes,’ you can determine how much of an emergency fund you need to have in place, and what you need to save. If you know what you need to live, and you have 5 – 10 years worth in cash and bonds, you can go many years without needing to sell you stocks. This goes a long way when the market drops and you feel a pit in your stomach.

Talk to us!
As a fee-only financial advisor we are focused on our clients. We can help you determine how much you can safely withdraw from your savings, how much risk you can take in your portfolio and how you can minimize the impact of taxes on your life. We can provide you with personal – not rule-of-thumb – financial advice.

The best way to deal with fear is to face it, and having a plan is the best defense. Focus on what you CAN control and call us if you feel you need some help.