Plan for the worst case scenario.

Standard of living to fall?

Standard of living is going to be 'rocky' in the next 5-10 years particular in the western world. Rising oil/gas prices, monetary inflation, and inevitable higher interest rates will have a toll on North America service based industry that relies increasingly on imported goods. With that said North Americans ought to have a healthy concern of the potential struggles ahead and take some small steps to avoid being caught off guard.

Lower your expectations.

Most people make the mistake of setting their expectation level based on the lifestyles of the people around them. We seem to live in a subconscious delusion that prosperity and high standard of living is something we deservingly inherit because we happen to be born in such a country. What escapes the notice of some is that not all wealthy countries stay wealthy, and there are fundamental points in history that had dramatic effects on the changes in prosperity. There seems to be a false sense of security that the the scales will forever tip in the favor of the well off countries. Ironically history shows that this false sense of security could be precisely what tips the scale in the opposite direction. Our expectations, habits, and goals should not be aligned to what we see our neighbors, friends, and family are doing but rather directed to where our common sense tells us in light of the big picture. In other words, if we rely heavily on outside goods or even government services for that matter then we should always be pivoting towards more self sufficiency (particularly as individuals or small communities).

Practical Steps

Take some practical steps immediately to exercise control over spending. Wait an extra year or three before buying that new car, do a family game night instead of dropping $100 sending them to the movies, or calculate what your top 3 expenses are in a month and make drastic changes to those categories no matter how practical you think they are. One mistake people often make when they decide against that big purchase, they tend to reward themselves with something smaller instead. For example, you decide to put off a new car purchase for a year so you reward yourself with a new phone. This is flawed logic and falls short of the concept I am trying to explain, in fact I have seen it have the reverse affect where the person ends up buying the car anyways 4 months later so they end up spending even more than they would have. We're talking an entire lifestyle change of enduring resistance against digging yourself into debt or relying on outside help when you have a real option of doing neither if you were completely honest about it.