If we can make it through talking about sex unscathed, I think it’s time to talk about the biggest of all taboo topics: money.
I’m actually surprised with myself for going this many months and never broaching the topic because I have a strange love for learning and talking about personal finance. It’s my belief that we live in backwards culture whereby we are taught how to sew pillowcases, use heavy machinery to make wooden materials, and see slides of STDs and learn about hormones and sex throughout middle and high school, yet important topics such as saving, credit, and the value of money are never mentioned. I vividly remember a time when my mom asked my high school guidance counselor if she could volunteer to teach such a class and was turned away. Some one’s got some ‘splaning to do in my book, but apparently we shouldn’t ruffle any feathers and change a curriculum from the 50s.
I could go on any number of tangents here, but I want to start with a basic: savings. If you’re reading this, likelihood is you either have a job, are in school, or are married to someone who has a job. Or, you could be me and have a ‘business’ and struggle with the fact that you can’t always put your own knowledge into play. Regardless, somehow you are surviving and therefore you have ‘income’. Even if it’s a grant or help from mom and dad, find a way to institute this principle now, if for nothing more than fear that you may never learn this critical principle otherwise.
Let’s make this simple. Whatever you make every month, how strenuous would it be to immediately (or automatically) put 10% of that into a separate savings or money market account? At first, perhaps a bit painful, but realistically, where is that 10% going every month? Dinners out? Long nights of drinking? A few trips to the nail or hair salon? A night playing poker with your friends? Online shopping? Whatever it is for you, be honest with yourself. I bet you could easily find some places to cut back and ‘pay yourself first’, thus allowing you to create an emergency fund or an investment fund once your savings are large enough. It’s the opinion of some experts to have 3-6 months of living expenses in savings. It’s my opinion (especially these days) to have 6-12 months. That will vary based on your level of comfort with risk and how you generally feel about savings. Whatever your opinion, set this aside in an account that is not attached to your checkbook or a debit card!! Preferably a money market account where you can make marginal interest on the money (since it’s only there in case of emergency….and they do happen), but have access to it a matter of a couple days when you need it.
Like anything in life, it’s about forming positive habits and breaking negative ones. Are you a smoker? Over-eater? Can’t seem to get a gym routine down? All a matter of priorities and habit. Money is no different. Don’t let money rule you. Take control with this basic principle and you’ll begin to feel a bit of freedom. Really, that’s all money is: a bartering tool to get us the things we need and want in life and hopefully a tool to create freedom for us to have and enjoy those things. If you’re feeling like a slave to money, re-read this post over and over until you’re ready to give it a try. That’s step one; step two will come eventually. It’s all about baby steps and making this a knee-jerk reaction every time that check hits your account.
Suggested reading to kick-start your financial education:
Rich Dad, Poor Dad, Robert Kiyosaki
Smart Women Finish Rich (also for guys), David Bach
The Millionaire Next Door, Stanley and Danko
Think and Grow Rich, Napoleon Hill