For much of my career in Washington, I’ve paid close attention to economic indicators and financial markets, something I always found ironic given that I have a master’s degree in English and won an academic prize in graduate school for literary criticism.

Lately, I’ve been paying attention to a different kind of “economy.” Long before the dismal science, Keynesian theory and the Laffer curve came into our lexicon, economy meant the prudent management of household affairs. Economy comes from the Greek oikonomia, literally to “manage a house.” “Husbandry” and “stewardship” are two other words that also come to mind—remnants of time when frugality, self-reliance and living within your means were virtues. I guess that was before the credit card was invented!

Do you have nest egg you can tap?

Now that I am trying to make a go of it as an independent public relations and marketing consultant, I understand full well what economy means in the Greek sense. I have been husbanding my resources and learning that many of the things that I thought I needed (or just plain wanted) aren’t really necessary.

In my first post to this blog, I paid homage to Henry David Thoreau and his experiment at Walden Pond. Lest you think Thoreau was long on iconoclasm and short on practicality, you might want to read his chapter entitled “Economy.” You’ll see that there was a very sensible and businesslike aspect to his stay in the woods. As Thoreau himself says, “I have always endeavored to acquire strict business habits; they are indispensable to every man.”

Of course, Thoreau takes a utilitarian view of the basics in life—food, shelter and clothing—and notes that most people pay way too much mind to how they are dressed and where they live. As he relates, “Most of the luxuries, and many of the so-called comforts of life, are not only not indispensable, but positive hindrances to the elevation of mankind.”

I like the way he itemizes every expense associated in constructing his 10×15-foot cabin at Walden Pond.

Boards………………………………………………………. $8.03+, mostly shanty boards.
Refuse shingles for roof sides………………………… 4.00
Laths…………………………………………………………… 1.25
Two second-hand windows with glass……………. 2.43
One thousand old brick………………………………… 4.00
Two casks of lime…………………………………………  2.40 That was high.
Hair……………………………………………………………  0.31 More than I needed.
Mantle-tree iron………………………………………….. 0.15
Nails…………………………………………………………… 3.90
Hinges and screws……………………………………….. 0.14
Latch………………………………………………………….. 0.10
Chalk………………………………………………………….. 0.01
Transportation…………………………………………….. 1.40 I carried a good part on my back.
In all………………………………………………………. $28.12+

Thoreau boasts that he built his house for less than it costs to rent a room. (“At Cambridge College the mere rent of a student’s room, which is only a little larger than my own, is thirty dollars each year…”) Wouldn’t it be great if that were the case today?

If you are changing careers or starting a new business, have you thought through the economics of your new venture? Have you sat down and itemized everything? You may be in for a rude awakening if you haven’t adequately planned for the inevitable dry spell you will encounter when you first get started.

There are many rules of thumb as to how much money you should have banked before you make the transition from employed to underemployed. I would say “it depends” (a good answer for just about everything!). It depends on your personal circumstances. Are you single and debt-free? Or do you have a family to support? Can you rely on the income of a spouse or family member to tide you through? What are your start-up costs? What reasonable expectations do you have for financing (if you need it)? And, finally, what prospects do you have for business? (Hmm, you do want to make money, don’t you?) From what friends and colleagues have told me, you better be prepared (especially in this economy) to be self-sufficient for at least a year, and it may be two years or more before you are making the kind of money you aspire to.

As the old saying goes, “Keep your head in the clouds and your feet on the ground.” You may think being an entrepreneur is all about business development and “doing deals.” It can be an exhilarating ride. But like those daring trapeze artists who swing through the air with seeming ease, you best have a net below to catch you if you fall.