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Do you have a financial safety net?

We are told to expect flat Bermuda economic performance for this year. Our Gross Domestic Product (GDP) as reported last week, has shrunk for the fourth straight year — the cumulative effect of increasing prior year's expenditures and decreased revenues.

For those tired of acronyms, Gross Domestic Product (GDP) is a fancy term for some common sense math.

The Government statistical numbers in a year (in the income calculation approach) add up the total compensation paid to all employees, the profits of large and small companies, and taxes paid less any subsidies (i.e. payroll exemptions).

In a booming economy, wages are up, profits are up, taxes are all up creating a rosy glow across the local economic spectrum.

Diminishing economies see just the reverse: lower wages, fewer people employed, tougher business climate generating lower or no profits at all, and following those chain links, lower taxes.

In today's workplace world, no job is completely secure. No investment is completely without risk. No healthy individual is completely without health issues on a long-term basis indefinitely.

What can you do as an individual except to hang on, remain optimistic, hoping that you can weather the downturn this year?

We Bermuda residents are getting used to these times, but planning ahead even if we don't know where we'll be economically is still very important.

Do you have a financial safety net for hard times? Yes? Then, you are one of the lucky ones with possibly a financially stable family to fall back on, adequate savings, or holding a career position that appears to be virtually untouchable.

You also may be a person who pays cash for everything, no cash, no purchase; or perhaps, you are a person (or couple) who have decided that no cash will be spent if items already available can be used, eaten, acquired, or recycled for virtually nothing.

What if you do not feel that you have an adequate safety net, and are relying upon hope, government, and the powers that be to turn things around because at this point, you feel pretty vulnerable, almost powerless?

If you are in the first group, you may already in control of your personal financial environment because every time you practice financial restraint in savings, you are preparing yourself for better times in the future.

Think you are more likely in the second group? There are still things you can do, however small, to feel that you are in control.

It is realistic to understand that not everyone is (or can be) so full of careful forward planning, and may now find themselves facing impending situations that will adverse affect them moving forward. But, again, you are not completely powerless!

You can effect change: in your mindset, in your work environment, in your lifestyle habits.

The time to think about planning then is now, not later when your emotions are fluctuating wildly, your family is stressed, and your work environment has gone from complacency to instability.

Perhaps you should begin by asking — what does a safety net represent to me?

Most people think of the net as cash in reserve, or something equivalent that can be drawn on when family security is under threat.

Of course, there are other definitions, but this is the most relevant.

Right, so we want to focus on building and augmenting a safety net for you and your family.

To do this, you can start by becoming a thrift engineer.

Many of the following ideas are common sense, and even commonplace, but they bear repeating in order to get your safety net programme in gear.

Let us start with a few basic ideas. What do you need to survive: food, water, shelter, a means to earn a living, and a way to protect what you have in order to reach more affluent times?

How do you do this? By watching every single penny you have, and thinking carefully about alternatives before you spend it.

Seek the best advice. Use the internet to research frugal living, cheapskate, and penny pincers well-known websites.

Talk to your Granny and Grandfather first if you are lucky enough to still have them with the family. They knew how to stretch every single dollar and the fewer dollars they spent the less anxious they were about the future.

They did not have our resources.

In tougher days with less co-operative attitudes than we want to think about, they might not have been able to get a personal loan, or a credit card, a mortgage, afford health insurance and many of the other comforts, we feel entitled today.

They were self-sufficient, independent, and knew how to be survivors. Respect what they know, and listen carefully to how they became successful. We often dismiss our elders, but they are knowledgeable way beyond our younger years.

Modify your Style and fashion. Become an individual.

Where is it written that everything has to be new, or a different spectacular outfit every day?

There is a reason that all of the local financial institutions have professional uniforms for their staff.

Shopping recently at the Barn during their big half-price sale was a huge crowd budgeting event. The lines stretched out the door.

We are becoming more aware that your value is in who you are and how you perform at your job and with your family than the brand you are wearing or carrying on your arm.

You cannot eat designer bags, while buying a new outfit every week just to “go out” is wasting precious contingency savings.

Where is it written that you have to serve meat at every meal, every day? How about trying once a week, every two weeks, or once a month. We've been spoiled.

The rest of the world gets by on very little food per person per day, and those people tend to be very little in size compared to our ever-expanding waistlines.

You may be indignant because I am picking on you. You are correct.

We have never had it so easy or so plentiful compared to previous generations, and emerging market countries.

This is where your parents and grandparents truly excelled.

Pea or bean soup; peas and rice; bread pudding; rice custard; soups of all kinds, otherwise known as refrigerator leftover soups; biscuits and breads; little to no junk food; anything edible that could be gathered off the land or the sea for free was used; consume two meals a day, not three, and avoid second helpings.

Everything possible was homemade.

Cheaper, more nutritious, and with these meals a communal binding that is gradually being lost today.

What could not be made was bought at the lowest price possible, or repaired, recycled, sold “down the road”, bartered, or converted into something else. Nothing wasted, almost nothing thrown away.

Every dollar saved is a dollar added to your safety net.

Readers, I am compiling an extensive list of cheapskate and surviving ideas and welcome any suggestions that you may have that work for you. The Pondstraddler website will feature a section under Financial Survival on old-fashioned and new strategies to reuse, refresh, restrain (from buying), and using resources wisely.

Please send any tips that you might like to share to or

Martha Harris Myron JP CPA PFS CFP is a Bermudian journalist and a cross border financial planning specialist. President of Pondstraddler? Life™ Consultancy. Publications, Presentations and Seminars.

Build a safety net: To do this, Martha says, you can start by becoming ‘a thrift engineer'.

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Published September 14, 2013 at 9:00 am (Updated September 13, 2013 at 2:42 pm)

Do you have a financial safety net?

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