It's been an interesting couple of weeks. The majority of discussions I've had somehow involve money. The basic question, "how do I save?". All the way to, "why do they charge so much?!". So I thought I'd do a quick breakdown to these questions.
Just so you all don't think I'm a financial saint I want to give you some history. When I was in college a nice gentleman (aka: moron) agreed to giving me a credit card. At that time the Fairfield Mall in Beavercreek, OH had just been built. What is a girl to do during her 3 hour break between classes, but go shopping?! At the crisp age of 20 I had over $8,000 in credit card debt. I came home from class one day to find my dad had opened my mail and my credit card bill was on the kitchen table with the balance circled and a note that said, "don't go anywhere, we need to talk." Oh holy crap. This was it. My dad was truly going to kill me. I knew I had driven him crazy as a teenager, but this time I was sure I had thrown him completely over the edge. Instead he sat me down, explained the severity, and created a game plan on how to pay it off. That summer I worked two jobs, Cub Foods and Kettering Rec Center. I would go from one to another. I even worked third shift at Cubs because it paid a whole .50¢ more per hour. I finally paid it off and have never been in debt to a credit card company again. Oh, and yes, that was the worst summer of my life.
Saving money has always been a constant topic in my family. Since I was a kid my father preached to the heavens about how important it was to be debt free and save for retirement. Up until the past 8 years, I never fully understood the concept. I just knew I was saving money, but it never fully sunk in as to why. Now that I am approaching my forties (that just about made me puke), the realization of retirement is becoming ever more clear. There is a light, dim as it may be, at the end of this long tunnel.
Here is the basic principle of money. Don't spend what you don't have. I can hear the screams now.... "BUT!!" Yes, I know, you NEED that 10th pair of $115 Buckle jeans, and you NEED to add to your collection of Coach handbags.... just like I NEED to eat Esther Price candy. No, no I don't. You see, your addiction to spending is just like my addiction to food. You put a bag of Oreo cookies in front of me and you can kiss them goodbye. What's the best way to kick the habit? Write every penny that you spend down. I don't care if you gave your son a quarter for a gumball. Write. It. Down. Do this for 30 days and then tally it all up. Holy crap! That's a whole lot of money, huh? The biggest question I try to ask myself is, "do I NEED this or do I just WANT this?"
Let's be honest, I own a lake house. I wanted it. I own a boat. I wanted it. For both of these items I created clear goals in order to achieve them. I knew when I was 25 that I wanted to one day own lake property. Every week I put aside money in my "goal fund" so that one day I would have enough money for the down payment. I bought my lake house when I was 33. Once I bought the house I knew I needed a boat. Again, I set the goal and I worked to achieve it. For two years I saved by cutting coupons, shopping for clothes at Target and Goodwill, and pretty much became a homebody during the winter months. At 35 I bought a pontoon, paid in full.
How do you know a need from a want? You need water, electricity, a roof over your head, healthcare, etc... You want to eat out daily, purchase more shoes, purses, and clothing than you really need. Just like I need to eat more vegetable, but I want to eat ice cream. Get it? And let's be clear, we all make mistakes. Whether it's on a diet or saving money. I do eat ice cream. And you will spend too much sometimes. But luckily, every minute is a new beginning.
