For The Love Of Money
Let’s talk money today. I love money. I don’t actually have a lot of it, I don’t know that much about it, and I’m too lazy too figure out all the complicated crap. That’s why I have an accountant. I keep my rules simple, and they seem to work pretty well.
Living paycheck to paycheck is commonplace these days, I think. Instead of having a cash reserve for emergencies, we tend to have credit cards for emergencies. I guess it depends what kind of emergency we’re talking about. There are so many bills to pay…..mortgage, car loan, students loan, line of credit, utilities, groceries, kids activities, vet bills. The list is endless. Every penny is spoken for. It’s hard to budget. Right?
I don’t know. I mean, your salary is what is is, right? You have X amount of money to spend in any given period and its your problem to allocate it as necessary.
That’s no different than a generation or two ago. When most families were single income, and had more children. So what’s different? Why does it feel like everyone is struggling to make ends meet these days?
I think there are a couple of things different. One, things cost more. Duh. But we also make more, and have two incomes now. So whatever.
Two. Everything costs more when you add interest to it. We have become a credit relying society. Nobody knows how to save up for shit anymore. We see it, we want it, we whip out a credit card without a second thought. Guess what? Now that item just cost 12.9 % more. Or 18 % percent more, or whatever your interest rate is. When you have to pay cash for something, it hurts more to part with your money. For reals.
Three. We have blurred the line between want and need. I think if we looked really hard at our expenses, we would find a way to trim the fat. I look at our bill for phone/internet/cable and think to myself holy shit. We could seriously pay for another new car with what we spend on mindless entertainment every month. For reals.
I guess what spurred my post this morning was this article on http://www.msn.ca; a slideshow on 10 ways to get out of debt. The advice is nothing new. Consolidate, only use credit for emergencies etc. But maybe they missed out the most obvious thing. Maybe they need to spell it out a little clearer. Don’t spend what you don’t have.
And by not spending what you don’t have, I mean including in your monthly expenses a donation to your savings account, or sock under the bed, or coffee tins under the counter. Or all of the above. Predict your future. Because in your future, your roof will leak, your furnace will go, your car will die. One of you might lose your job. Could you get by?
We have a couple of unwritten rules in our house. The first is one major purchase at a time. This excludes mortgage and car payment. These will both plague us for the next ten years or so. So if you just spent 5,000$ on a new living room, you aren’t allowed to do the bathroom until you pay off the living room. What if your bathroom sucks? I guess you should have prioritized better. What if your bathroom start spraying water everywhere? See emergency fund.
The other rule is to ask ourselves if we would be able to pay our bills if one of us was working a minimum wage type job. Would you survive if one got fired and had to take a job at McDicks until you found something better? If the answer is no, I think you are stretching yourself too thin.
Anyway. I’m no expert, but I think we can all make changes to our spending habits. I mean everyone points to the banks and the rich people and blames their greed on the current state of the economics in the world. But I think the truth is we are all guilty of the same thing. We get used to a certain lifestyle and the thought of having to do with less is terrifying. And while the rich people and banks and politicians are dirty and greedy and all of that, we are partly responsible because we decided our desire for more things outweighed our common sense.
And don’t get me wrong. There are people out there who budget every cent and still struggle. There are single parents who can hardly feed their kids. There are families who work harder than you or I will ever know how to, and still come up short. I am talking about the middle class.
So appreciate what you have, and don’t always have your sights set on something new. Because sometimes something old will do.