Oh, money. The root of all sin. It can not buy you happiness. Or love. But it can buy food and a house and a car.
I wish I’ve realized that when I was young.
My unhealthy attitude to money began at a very young age. When I was 8 years old, I found out that my parents collected all their money and put them in small jars around the house. They never really did anything to them, so they just lay there collecting dust. It’s wasteful, isn’t it? So I decided to help them out and put that change to use: by stealing it, riding my bike three miles towards the nearest grocery store, and spending every penny on candy. That may well be the starting point for my weight problem, but that’s another matter. I learned an important and very bad lesson that day: You can “borrow” money, buy things you want, and never payback!
That lesson will come back to bite my ass in about 20 years.
Fast-forward to 2002. I’m in college and working part-time. My parents were paying for my tuition and accommodation, so I had a little bit of room to spend. In anticipation of a hot date, I decided to go buy a new outfit to impress any losers I met from Myspace that week. I found what I was sure was a fully decorated cord coat by Sarah Michelle Gellar during her Buffy days at Lord’s & amp; Taylor.
When I went to pay, the very cute woman at the counter asked me if I wanted to save 15% by opening a paid account. You mean to tell me I won’t have to spend money in my pocket, and will you give me a discount? What a blessing! I charged that $22 to my first credit card and immediately forgot it all. Fast-forward for another four years and I started getting all these calls from toll agencies. What do you mean I owe you more than $400 dollars? I never had a credit card… Oh, wait. That’s right, that top $22 turned into $400 thanks to late-payment fees and interest.
And my credit problem began. You would think I learned later, but no. It took almost a decade, about $30,000 in debt, and ruined my husband’s credit before I actually learned my lesson.
I did everything wrong that you could literally think of money:
Putting aside a huge debt for no good reason? Check.
Can’t save even a penny on hard times? Check.
Living on my vehicle at every turn? Check.
Planning to retire in the future by pulling out 401k cash when I’m 32? Check.
In just the last year or two, I’ve realized how bad it has really become. After each pay cheque, we have about $20 after bills and groceries. I often sit and wonder why I’m doing this to myself. I’m not a stupid person, but I may have some impulse control issues. The initials at Target call me. Do I need any of them? Not sure? It’s getting a discount! Not.
So please, for the love of Benjamin Franklin (or soon Harriet Tubman), heed my warning and learn from my mistakes.
Unless you prefer to have a job and still have no money to spend, don’t buy unnecessary things. If you have to have it, pay cash.
If you have to use credit, pay the full bill each month or as soon as possible. Don’t just pay the minimum balance.
Put the money behind each paycheck and don’t touch it! In case an emergency occurs, you must be prepared.
I know this seems like really basic advice. Everyone knows this tool. But, knowing and doing are two completely different things. The Federal Reserve’s 2015 SHED report (read thrillingly, btw) found that fewer than half of U.S. families could pay an emergency of $400 if a need arises.
The first step toward success is to set goals. If you’re overstoring, stop it. If you have debts, pay it. If you have a tight savings account, strengthen it. If you have a retirement plan, don’t touch it.
Your future with thank you.