Don’t let your money boss you around!
(Photo from Pixabay)
When I was a kindergartener, I befriended a girl who was literally named Barbie. She and I were inseparable during elementary school despite our very different lives. Some of those differences were because of money, although I did not understand that at first.
There was much to covet in Barbie’s life. She was an only child; I was the youngest of six. She was an extrovert and popular; I was an introvert and loner. Her parents were young and slept in the same bed; mine were considerably older and didn’t.
I didn’t realize at the time that you could take charge of your life and make changes. I just knew Barbie lived in an awesome world and I wanted her parents to adopt me.
Why do some people have so much?
Even though her home was an apartment, it was in a very trendy part of town (at the time) and was lavishly decorated. They had a grand piano in their living room and it was finished in white with gold shimmering. They ate in the dining room (we ate on plastic fold-out trays in front of the TV) and there was a balcony dense with beautiful, lush houseplants. Her dog was a purebred Cocker Spaniel (ours was a mutt, albeit a very well-loved one) and she took dance lessons: ballet, tap, and acrobatics. In short, she (actually her parents) had money.
I remember that I was so enthralled with Barbie’s home on my first visit that I asked her if I could have something. She had so many dolls, games, clothes, and shoes that I figured she wouldn’t mind letting something go. That was my child-like mindset at the time: she had so much, I had so little. It sounded like a great idea (she ended up giving me a folding, bejeweled comb, not the Chrissy doll I had hoped for.)
Money belongs to the lucky few
Kids think that way about money: some have it while others don’t. And if you want something, you have to ask. They don’t understand where money comes from or that people earn it, feed it, and take care of it. There are simply lucky people who are rich and unlucky ones who are poor. That’s how it worked.
As I grew up I never really questioned those early assumptions about money. Especially the parts about people being rich because they were lucky. Sure, I had worked since I was fifteen and knew how to save money. I knew I had to somehow get into college if I wanted to be qualified for better employment and opportunities. But I never really believed I would ever have enough money to feel comfortable much less that I could ever actually be rich.
Money was something strange and elusive to me; it seemed like you had to be an insider in some way to get it, have it, or keep it. That’s partly because no one talked about it in my family except when my parents declared we couldn’t afford certain things (which was nearly everything).
I remember asking my mom once how much dad made per year (my mother did not work outside the home), and she told me that it was rude to ask people how much they earned. That’s true most of the time but this was my family, I remember thinking. Why can’t I know? I concluded that struggling for money was something to be ashamed of and that needing to struggle was our destiny. I didn’t ask my parents any more money questions after that.
Develop a more grown up outlook
I didn’t challenge my childhood money assumptions for decades and it seems like few other people I knew did, either. When I started at my first good job with health insurance, paid vacation, and paid sick days, however, I began to see that such benefits not only protected my income they actually increased it. I’d never been able to take time off to go to the doctor without losing a day’s pay; I’d never been able to enjoy Labor Day or Thanksgiving or Christmas without sacrificing wages. My new job not only payed me more per hour than any others I’d had in the past, it allowed me to take care of myself and improve my life in many more ways than I ever expected.
As I continued through adulthood, I learned to look for benefits in addition to the hourly wage or salary when I sought new employment. Terms such as life insurance and individual retirement accounts became part of my lexicon. I didn’t delve too deeply into financial planning, but I made a start. Eventually I was depositing funds automatically through direct bank transfers and not even missing the money.
Because several family members and a friend or two had retired (somewhat young at that), I decided I was intrigued. The idea of not dragging my ass to work everyday was fascinating and compelling. I wanted to know more. In 2011, I googled retirement planning and clicked on the first blog that came up: Early Retirement Extreme. My true education had just begun. I would soon come to understand that you could learn about money and improve your life.
Financial literacy and independence are possible
The blog is still available, although the posts are not new (they recycle constantly). The information provided there, however, is gold. Not necessarily because the author (Jacob Fisker) has the magic answer for everyone but because he offers thoughtful alternatives to the traditional financial speak of “experts” like Suze Orman.
She claims you need at least $5 million to retire in your late twenties or early thirties (see the article). Anyone listening to Orman would simply give up on retiring at all if that’s how much you really needed to remain financially secure.
And never mind retiring, how about just making ends meet right now? Many of us feel pinched financially at times (if not all the time) and blogs like Early Retirement Extreme simply remind us that there are other ways to live. Yes, you can do without cable or an Escalade or new clothes all the time. You can choose to live closer to work and take public transportation. You could eat at home more and improve not only your finances but your also your health.
So, in other words, you can take control of your finances if you really want to. The most important concepts to understand are that money is not magic and it does not define you. If you’re short on funds and can’t make progress toward the life you want to lead, get help. Read. Talk to friends who are more successful than you. Ask those around you if they have financial professionals they recommend. But don’t just assume you’re no good because you’re poor and that’s the way it’s going to be. That mindset itself is actually what’s weighing you down, not your lack of money.
Everyone makes mistakes with money
For the longest time I felt ashamed of my financial situation. I had some debt and had purchased things that ended up costing me more to keep (like boats) than they were worth. I’ve never been one to shop till I drop or run up charges on my credit card, but I have tended to spend more than I need to, usually out of laziness more than anything else.
The problem with being lazy or ignorant around money is that it tends to magnify difficulties. My fear was that we would never have enough money to handle emergencies (like a totaled car or damaged roof) and that we would always be scrambling from paycheck to paycheck. For a number of years I lived with that fear instead of confronting it. Hence, more money slipped away and very little if any was available when suddenly needed. It’s not that we had no money; it’s that we weren’t paying attention to it. Once that changed, everything else fell into place. It took awhile, but things got better.
Invest the time to learn and then reap the rewards
Because of blogs like Early Retirement Extreme and Mr. Money Mustache, I was able to learn about money and investing and I acted on it. I developed spreadsheets to pay off two big loans, created an emergency fund with nearly eight months of living expenses, and increased the amounts deposited in our IRA’s each month (we’re nearly maximized).
All of that took about three years but now our bills, savings, and investments are on auto-pay and our expenses are under control. A little bit of attention up front, as well as some maintenance every month or so, has turned the tables: money is our servant, not the other way around.
These days I enjoy extra money in my bank account every month because we’ve outlived our mortgage (my husband and I opted for a fifteen year one) in addition to having paid off the other debts referred to above. The best part about the debt payoff is that not owing money is essentially like another revenue stream. Instead of money flowing out to the mortgage broker or the credit card companies, it’s flowing into the savings or investment accounts of your choice. It then grows there. Knowing you have it feels good. And yes, that can happen for you, too!
Consider visiting the blogs I mentioned here or do a search for others you might like better. Find a few books; there are many in Kindle Unlimited and at your local library (which probably has ebooks or audiobooks that you can check out online.) But never assume that you’re struggling because it’s your destiny. Or because you’re not smart enough or good enough or hardworking enough.
Money doesn’t care about any of that. All it needs is to be told what to do. And in order to do that you’ll have to learn about money and improve your life by absolutely never ignoring it or losing respect for it. Money listens very well. If you’re giving it good direction, it will respond quite lovingly.
.