Principles of Purpose: Manage Money
Tentatively titled Principles of Purpose: A Guide To Living Wisely, is an ongoing draft of a concept I might one day publish a book on. It’s essentially 30 Principles that I think are essential to living life wisely. Some are principles that I wished I had learned much earlier in life. Many are principles that I only learned in recovery in 2016-2017. Still other principles were ones I had applied off and on during my 56 years.
|Preface||Introduction||Trusting Your Gut||Use Good Judgement|
|Listen||Regulate Emotions||Set Boundaries||Be Mindful|
|Practice Moderation||Manage Expectations||Resolve Conflict||Plan Ahead|
|Have Patience||Be Yourself||Practice Acceptance||Be Grateful|
“Too many people spend money they haven’t earned to buy things they don’t want to impress people they don’t like.”Will Rogers
Poor Money Management
Because of my impulsive nature and poor self-discipline, I have never managed money well. Growing up nobody taught me the value and importance of fiscal responsibility. When I had money I spent it. Immediately. I burned through money with no regard to the consequences. “A fool and his money…”
Three times I have had to rebuild my shoddy credit history because of this. I even claimed bankruptcy in 1997, only to crash and burn a decade later. Throughout my life I managed to fail financially. Time and time again my impulsivity and lack of fiscal responsibility caused me major problems. I just couldn’t save money, or manage the money that I earned.
Believe it or not, it has only been the last few years that I have paid strict attention to the money coming in and the money going out. Although I still struggle sometimes with impulsive purchases, I have limited the scope of damage by paying attention to my bank statements; something I really never did much of. As a result of my new-found responsibility, I have been able to stay out of credit card debt, settle old debts, and even purchase a home. However, if I do not remain vigilant, I know that I could easily slip back into financial immaturity.
Part of managing money is being about to save it! Saving money is nearly impossible for those of us living from paycheck to paycheck. With all the deductions and taxes, most of us struggle to maintain our livelihoods let alone save money. There’s an old adage when it comes to saving money that you should always “Pay yourself first.” That’s easier said than done with all the expenses most of us have.
The best way to save money is to make sure you take a percentage of your paycheck (that you can sustain and maintain) and put it towards savings. A percentage versus an actual amount works especially well for folks with different paycheck amounts each week. In order to successfully build a decent savings account it takes a realistic amount you can afford to put away each paycheck.
As I said earlier, it has only been the last few years that I have actually concentrated on managing my money; and today I am proud to say that I have a decent savings account. I’ve bought a few CD’s as well. For some of you all this might seem elementary; however, for me it’s always been a struggle. Even today I have to pay particular attention to what goes into the savings account. It is enough to live off of for 4 months. I’d like to get it up to 12 months. Then I would really feel as though I have accomplished something.
Credit and Debt
I got my first credit card when I was in college. It was a Sears charge card. I promptly maxed it out and then failed to make the payments on it. I have not historically done well with managing my credit. No surprise there.
Because I misused credit, I had to file bankruptcy in 1997. I recovered from that bankruptcy, bringing my score back over 700. I didn’t learn from my earlier mistakes, and my credit hit rock bottom twice more. Last year I negotiated many settlements with old creditors. My score is finally approaching 700 once again.
I now have just one credit card. If I can’t afford something, I usually don’t buy it. I have managed the one credit card wisely; using it for larger purchases in order to rebuild my credit. I then pay it off at the end of the month to avoid surcharges and interest charges.
Being overextended seems to be the American way. Foolishly we use credit to buy things we can’t afford. Then we are stuck making payments with the money we can’t afford to make the payments with. I suspect more than some of you are stuck on the credit hamster wheel: making minimum payments on credit cards and barely having money left over to have any kind of savings.
It takes a serious attitude shift about finances to manage money successfully. Spending money when you don’t have it. Using credit cards to manage daily life. Ignoring the need to save some kind of percentage of your paycheck. In today’s world, for most of us any way, eeking out a living is becoming more and more difficult. Making ends meet an almost daily challenge.
At 57, it’s a bit late for me to be thinking about retirement plans and such. I no longer have that luxury. However, I do have the luxury of paying attention to my bottom line and ensuring there is money for emergencies. I also have a responsibility to my wife and daughter. I have savings accounts for them as well. The last thing that’s going to happen to my daughter is for her not to understand the importance of managing her money.
I am still a ways away from ensuring I have at least 6 month’s worth of living expenses securely tucked away in my savings account. But I am on top of my finances like never before.
Maybe I can avoid the calamities a future of money woes by being smart this time. It’s never too late to right the ship.