I started this blog over 18 months ago to track my progress toward paying off debt and ultimate financial independence. Along the way I have admitted many of the mistakes I have made, I continue to make, but also am slowly but surely paying off my debt. Over that time I have learned some valuable lessons about myself in terms of personal finance. These lessons are both good and bad because they signify where I need to improve in my life, but also where I think I am doing well. Tell me what you think in the comments.
Lesson One: I value independence above wealth. Now this might come as a surprise and even a little weird. Why independence over being wealthy? Because I realize that there are specific things in life that make me happy. I don’t need lots of stuff. What I want is the ability to travel, be with my partner, choose how to spend my time, and hopefully make a difference in the lives of others. I certainly get that with the job I have, but the Notorious BIG was right when he said that Mo Money =Mo Problems. I value being able to do with my life what I want and not being a wage slave to others. If I continue to work until I am 80 that is my choice. As of right now I am a wage slave in some respects. I can’t quit tomorrow and my family be taken care of.
Lesson Two: I have a hard time focusing on one goal at a time. This is a lesson that I don’t think anyone should emulate. My biggest personal finance problem is focusing on one thing at a time. For example, I want to be debt free like tomorrow, but I also don’t want to give up my investments. I want to be able to travel and do what I want, but I don’t want to budget, etc, etc. I want my cake and eat it too, but the problem with that logic is that it doesn’t necessarily work. I spread myself to thin and I get cranky. I need to figure out how to do one at a time and be ok with that. That is probably the biggest thing I flagellate myself for not doing something.
Lesson Three: I have created financial rules for myself. I have realized that I do have four basic financial rules: 1) pay yourself first; 2) pay your bills next; 3) whatever money you have left over gets divided between paying off debt, savings, and/or fun; 4) entertainment is good. Notice that entertainment comes last. I am not a YOLO kind of guy. I hate people who say you only live once and then justify why they don’t save. You are right you only live once, but your 20s isn’t the best part of your life. My life keeps getting better not worst. Most of us have a lifetime to do stuff. You shouldn’t just justify bad behavior because you believe won’t live to see 50.
Lesson Four: I am a big believer in personal financial responsibility. Now before a lot of my friends go off on me for this let me explain. I totally get that there are some people who experience circumstances where they experience poverty, divorce, and other situations that keep them from financial prospering. However, I fully admit that I have no time for people who complain about not having money and then go out and buy $250 sneakers. In that situation, which isn’t that unusual, that person made a choice. They made a choice for short-term pleasure vs. long-term gain. I guess you can say I am somewhat intolerant of that. Now I am not saying that you can’t have fun or buy yourself stuff, but if you do it at the expense of your kids or your financial future (e.g. gamble money away, go shopping instead of paying rent, not paying your bills when you have the money) then I can certainly be a little prickly about the subject. Maybe that makes me a bit of curmudgeon…so be it.
Lesson Five: I want financial independence, not early retirement. A lot of people in the personal finance blogging world strive for FIRE (Financial Independence, Early Retirement). I am not that kind of person. I don’t want to “retire” early. And by retire I mean stop working. I want financial independence, which is what I explained above. For those that have that goal that is GREAT! I applaud you, but when I was on sabbatical last year I was bored. Yes I did plenty of work and I moved us into our new house, but I was bored. I need structured time. I need camaraderie. I need intellectual conversation and travel. And I get that with my current position and with my spouse. I value that above other things.
Lesson Six: Money serves as a means of control. On the surface that sounds horrible. You are a controlling jerk. That isn’t what I mean. What I mean is that there are a lot of things in my life I can’t control. I can’t control when we will have kids. I can’t control the weather. I can’t control the value of my house. I can’t control what other people do. However, I can control what I do. Money is an area where I feel like I can make a difference in securing a better future for my family. I mean I can’t control what Joe Schmo does down the street, but I can make sure I am debt free and putting money away and creating an environment where we don’t have to worry as much. If/when we have kids I want them to be able to feel secure financially. I want to feel secure financially. And at the moment I feel somewhat insecure. I might feel that in general, but certainly lowering my debt makes me feel better.
Lesson Seven: I compare myself to others WAY too much. I love reading personal finance blogs and hearing about the success stories of others. I love listening to Dave Ramsey’s callers who do their debt free scream, etc. I don’t begrudge them a bit, but I do wish that I was more successful. I wish that was me. And that wishing, however, can be really unhealthy. I know that it is fairly normal to compare yourselves to others, but I think I do it above and beyond. Most of the time no one knows I am doing it. For example, this morning I talked with a very good friend of mine. We talk about investments and money and the like. If you were to ask them you would think they aren’t doing very well, but as it turns out they are doing fantastic. And I think it is great. I am so happy for him and his family. But I couldn’t but think that I wish that was me. And the truth is that I haven’t been saving as long as others and I do much better than other people in the United States. So my comparisons are really pretty pathetic if you think about it. I am doing a lot better than most of the people in America. That, however, doesn’t stop me from making the comparison. It is unhealthy and I have to learn to be enough.
Lesson Eight: I LOVE financial coaching and coaching in general. Over the past 18 months I have been fortunate to have over 20,000 page views (I think). I am not sure sometimes how to read the stats. I couldn’t tell you if that was unique visitors or page views. The point is, however, during that time I have had a lot of people ask for some advice. And I give it with the caveat that I am not a financial professional and that I have made a ton of mistakes. So far so good. Some people take my advice, some don’t and that is fine. But I love working with people on their finances, helping them grow, providing information, sharing stories of success and failure (god knows I have a lot), and generally sharing our lives. I don’t think we talk about money enough or at least the way we talk about it needs to change. Maybe that is why I love teaching because I get to see the payoff with my students. It is really an incredible high because I feel like I am helping them in some small way. Financial coaching also gives me a high. I have even thought about getting a certification in financial coaching. Not sure if I will, but I do hope that this blog helps some people, even if it is learning not what to do. I have always loved coaching. I loved being a speech and debate coach for six years. This is another way for me to continue that coaching. I hope I help some of you even if it is for just entertainment.
So these are the lessons I have learned over the past 18 months. I am sure there are more. What about you? What financial lessons do you have for the world?