It never ceases to amaze me how things look “on the other side of the tracks”. Before I started following financial expert Dave Ramsey, I was just like every person I am about to rant on. I was “normal” - I did things with money that most everyone does… stuff that is socially acceptable and never gave it a second thought. When someone in the “know” would mention how money should be handled, I laughed and thought they were crazy. I had the mindset of a child - I did what felt good. If I wanted something, I bought it, even if it required me going into debt to do so. I have no shame and will admit, they were right - I was wrong.
The more money I make, the more money I can spend
I have a few really big qualms that I want to discuss here today. The first is, everyone seems to think, “the more money I make, the more money I can spend”. Someone gets a new job or a promotion, and the first thought that pops into their mind is, “what can I go out and buy now!?”. While that is bad enough, I have even witnessed people who haven’t even got that new job and are already planning how to spend that money, whether it be a new car, moving, shopping, etc. That is just sickening! Just because you make more money doesn’t mean you have to find a way to spend more.
And if they don’t have the money to buy something with cash, they rationalize their decision and “figure out” a way to justify borrowing money to make it happen. The reasons you will hear vary widely and are quite humorous: I don’t want to drive a crappy used car, I want to buy a hybrid to save money on gas, I work hard and I deserve a new ________, etc. Oh, shut up! You aren’t special, nobody is “too good” to drive a used car. Spending 25-30 grand on a new hybrid just to save $10 a week in gas doesn’t make sense financially. You would have to drive that car to the moon and back to get a return on your money. And, other people work just as hard as you, princess, you aren’t so special that you “deserve” something new all the time.
Budgeting
The second thing I want to touch on is knowing where your money is going each month. When you say the word “budget”, again, many people think that is below them and is only something that stupid people do. So wrong! A budget is MANDATORY if you ever want to be successful with money. You need to know where your money is going each month in order to make it work for you. I used to wonder where all of my money went, and then I started keeping track of where every dollar went each month. I found that I spent way too much money on food and was able to cut my spending on food by 50%. A budget is a rude slap in the face financially and will reveal exactly where all of your money goes each month.
Once a budget is in place, you then need to cut your lifestyle and your spending drastically. If every dollar comes in, and every dollar goes out, you will never be able to save money and pay cash for nice things you want. You will always be living paycheck to paycheck, on the brink of disaster. If you lose your job, that can push you over the edge into financial turmoil. That doesn’t sound like a fun place to me.
Cutting your lifestyle isn’t easy, but it also doesn’t mean you have to stay at home every day and be a total hobbit. You can take it to the extreme and do that and save a TON of money… or you can do a milder version of it. Cut back on how much you go out to eat or how often you go see that new movie or buy a new video game. It may not sound like much in conversation, but those savings add up really quick and you will see that reflected in your budget.
Frustration
The final thing I want to talk about is frustration… frustration after making the “jump” and being in the know. I consider myself a good person and a good friend, and it honestly hurts me to watch some of my friends be so foolish with money. What really gets to me is, when engaging in money talks with some of these people, it really shows how ignorant they are about money. They are just like I was at one time, which I can’t blame them for… but it really is an eye-opener to see every person recite the same BS reasons and thoughts about money. This is all stuff that they have been taught by society… and society is wrong! Like many other aspects in life, people won’t change unless they want to. I have to accept that, as much as I want to help people and give them advice, they just won’t listen until they are ready. Until then, I can only do what is best for me and will make me successful.
Let’s hear your thoughts on these topics! Do you live paycheck to paycheck? Do you save a percentage of your income each month? Do you do budget?
