Reflections on money

Posted on April 29, 2006 8 Comments

Over the past 18 months since I started this blog, and incidentally, since I seriously committed to my finances, I’ve learned a few things about spending and saving.

Don’t get me wrong – I’m the first to admit that I’m no expert in money management. And I know my financial journey in still on the first leg of the trip. There are decades, years, lifetimes of financial lessons I have yet to learn. However, here are some lessons I’ve learned along the way:

• Only I am responsible for my finances. I cannot blame my family for not bestowing a trust fund upon me, my boyfriend for trying to find his true calling via different careers, my school teachers for not educating me about money or any other life circumstance. Nor can I afford to simply take things as they come, with no plan of action. I am responsible for my financial past and future. Grumbling about where I’ve been (or haven’t been) does nothing.
• Learn what you can about money from those who have it. I wish I made the effort to talk to my Great Aunt Angie about money when she was alive. She came from the same family I did, yet she managed to save, invest, diversify, and make a killing off the stock market. She traveled the world. She had a career that she loved. And I never thought to ask her how she did it. I truly regret that.
I’ve started to talk more frequently with my friends about money. We chat about where our savings are going, we ask questions of each other. I talk about money with a financial advisor friend whenever I see him (he thinks I rely too heavily on Suze Ormon, for instance). I’ve learned there’s more to talk about with friends than celebrities, relationships and clothes.
The point is, resources are all around us. Opportunities exist each and every day to learn about money management, savings, investing and building a future.
• Invest in the future. You’re never too young to start a 401K or IRA. Never. I started mine at 25 and wish I started sooner. Think of this as a “have to” rather than a “can do,” resign yourself to your investment, and start socking money away. Anything less is not an option.
If your company matches investment funds and you’re still not investing, you’re loosing free money. Never forget that fact.
• Save, save and save. Think you’ll miss those $200 canary yellow kitten heels two weeks from today? I doubt it. In fact, I can guarantee you’ll feel worse having them on your credit card bill than not having them at all. If you don’t save your money, you won’t ever have any. Common sense right? So why is it so hard?
Start an automatic savings account that takes money out of your paycheck automatically. You won’t even know it’s missing. I promise.
• Find outlets to satisfy your spending cravings. I know, I know. You saw a Louis Vuitton bag two weeks ago and it’s STILL on your mind. Jessica Simpson was in Us Weekly carrying it this week. You HAVE to have it.
Honestly, I don’t know what will satisfy your shopping cravings. But for me, I find exercising, writing, knitting, or just staying away from the mall all help. Same goes for Target, which usually has a similarly styled bag for a fraction of the cost.
You know what doesn’t help? Going shopping with your best friend to get her opinion on a Louis Vuitton bag when you know she’s going to say it’s “sooooooo cute!” and that you “just have to have it because it matches your sunglasses AND your shoes and it would look so cute with that sun dress you got for your birthday last week!”
• Don’t fall victim to peer pressure. Here’s a typical weekend scenario:
Friend: “I really want to go out. Let’s go have a few drinks in Wrigleyville.”
Me: “I’m broke. And I have a headache, so I think I’m just going to stay in this weekend.”
Friend: “But I really want to go out and I have no one to go with! Take a Tyelonol. Come on, I’ll drive AND I’ll buy the first round.”
At this point you can either 1) Go out, or 2) Not go out. It’s really that simple. Your options here are NOT 1) Go out and remain in good standing with your friend, or 2) Not go out, thereby leaving that friend with no one to go out with, and thus, completely ruining her weekend. If she’s your true friend (and trust me, she is), she will understand. In my case, the call usually ends like this:
Me: Sorry lady, I just have to save some money. I’ll see you another time.
Friend: OK. I’ll call you tomorrow and tell you any good stories.
Five years ago, that same conversation would have ended like this:
Me: Well…. OK! Who cares if I’m broke and have a headache! I’m going out.
That’s $60 my savings account never saw, and really could have used.
• Saving is boring. Some nights I’m bored out of my mind and just want to shop or go out! Spending feels good AND makes me look cool. Saving takes forever and makes me feel like a loser, it’s true. But ultimately, what’s more important? The right now, or the long(ish) term? If you don’t care about the long-term, feel free to be all spendy and trendy. But make sure you have a cushion. Because your chic little Marc Jacobs dress with the fab little print down the left side that hugs your body “so perfectly” and the memories from your last Vegas trip aren’t gonna help you when you get sick, get pregnant, lose your job, need to move, get in a car accident, need a root canal, or want to buy a place.
I’m sorry. That was preachy. I totally feel your pain about feeling old and un-trendy. But seriously, folks, we just have to deal with it. We’re not millionaires. Yet.
• Sometimes, you have to splurge. Now I’m confusing you, I know. But if you can’t splurge every once in a while, what’s the point of saving? The interesting thing is, I find that being able to splurge on vacations, fancy dinners and yes, clothes, actually help me to be disciplined. I won’t buy tickets to see concerts, go out to movies, get expensive manicures, etc., if I know I’m saving for a big trip. I automatically become more disciplined because I have a nice, short-term goal in mind.
The key here is not to overdo it. If you’re splurging all the time, the expenses become a part of your everyday life, things you can’t live without. Make sure your splurges are planned, and that you can afford them (meaning they don’t affect your savings goals for the month, year or whatever).
• Investment returns are thrilling, and so is self-reliance. The more you put away, the more you get from it. Both financially and mentally. I never feel better than days I see my account growing. And not because I’m counting up all the material things I can buy. It’s because I’m creating security for myself. Security for my future.
• Life is about more than money. Don’t get too caught up in this stuff. It only takes one great conversation, one weekend hike, one amazing kiss, one moment of self-reflection, one life-changing experience to know that life is truly not about the money.

Category: Money
   Tags: basics , budgeting , Spending

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